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If any two partners can be said to symbolize a firm, S. Leslie Misrock and Jonathan A. Marshall symbolized New York’s Pennie & Edmonds. Both top trial lawyers in the field of intellectual property and patent law, Misrock and Marshall also spent a combined 75-year law career building the firm into a 200-lawyer powerhouse among IP boutiques. Misrock’s death last August at the age of 73 deprived Pennie & Edmonds of one of its stalwarts. Now it is preparing to lose the other, albeit for a very different reason. Marshall, senior partner and head of the firm’s litigation department, recently announced he would be leaving Pennie & Edmonds after 36 years to become a partner at 950-lawyer Weil, Gotshal & Manges at the end of the month. Marshall acknowledged mixed feeling about leaving Pennie & Edmonds, but said he had been deeply impressed by his visits at New York-based Weil Gotshal and meetings with attorneys in Weil Gotshal’s IP group. “Weil Gotshal had the same energy Pennie & Edmonds had in the mid-eighties,” he said. Marshall’s imminent departure is a significant blow to Pennie & Edmonds, which has recently experienced a number of other setbacks. Beyond that, however, the move is one of the more striking illustrations to date of what many attorneys in the field acknowledge is a growing trend: the expansion of large, general-practice firms onto turf previously occupied by IP boutiques. For years, New York firms like Pennie & Edmonds, Kenyon & Kenyon, and Fish & Neave; Washington, D.C.-based Finnegan Henderson Farabow Garrett & Dunner; and Boston-based Fish & Richardson were the first firms that companies called when significant patent litigation loomed. Now the boutiques have seen their market share eroded by competition from the large firms, a development with which Marshall is familiar. “I told my partners we had five years before the big general practice firms got it right,” he said. “That was five years ago.” LARGE-FIRM EXPANSION Large firms’ expansion into the area may have accelerated in recent months as firms suffering a downturn in their corporate practice areas have searched for growth elsewhere. Philadelphia-based Morgan Lewis & Bockius, which laid off scores of corporate associates in October, acquired 35-lawyer New York IP boutique Hopgood Calimafde Judlowe & Mondolino in December. Salem Katsh, the head of Shearman & Sterling’s IP group and the former founding partner of the IP practice at Weil Gotshal, said the Shearman group had doubled in size in the last year and was not affected by the large-scale associate cutbacks the firm instituted at the end of last October. About a year ago, New York-based Shearman & Sterling hired two new partners for its Menlo Park, Calif., office: Edward F. Mullowney and Vicki S. Veenker from Fish & Neave’s Palo Alto, Calif., office. Mullowney was Fish & Neave’s managing partner in Palo Alto and, like Marshall, a major figure in the world of IP litigation, said Robert F. Perry, a partner at Kenyon & Kenyon. “They’re the stalwarts of their firms,” Perry said. “It’s very surprising when people of that stature leave.” Marshall said he would not be leaving if he did not believe Pennie & Edmonds was a strong firm that would be able to meet future challenges. TROUBLED WATERS John J. Normile, co-managing partner at Pennie & Edmonds, said the firm would miss Marshall, but credited him and Misrock with creating strong institutional bonds with clients that the firm expected to endure. Normile noted the firm had a record year last year, though he would not disclose those profits. The American Lawyer‘s Am Law 200 survey from August 2000 placed the firm’s profits-per-partner at $780,000. Pennie & Edmonds has sailed some troubled waters of late. Apart from the death of Misrock, the firm was hit with lawsuits in 2000 by two former clients, adverse parties in a patent dispute, who alleged a conflict of interest. The litigation is still pending, and both Normile and Marshall declined to comment on its status. And last month, the firm was sanctioned by a Southern District judge for turning a blind eye to evidence that a client had submitted a false affidavit. The firm has also seen some other departures. In December, partner Alan Tenenbaum left for New York’s White & Case. In November 2000, Palo Alto-based partner William Galliani left to join Palo Alto-based Cooley Godward. More significantly, Pennie & Edmonds has had problems retaining its associates in recent years. In a 2000 survey by The American Lawyer, the firm was one of the lowest-ranked among New York firms by midlevel associates in terms of satisfaction. In the last three years, Pennie & Edmonds associates have gone on to bolster IP practices at firms like New York’s Skadden, Arps, Slate, Meagher & Flom and Chicago-based Kirkland & Ellis. Normile said the firm has taken measures to improve communications between partners and associates, and said the firm’s retention problem has been effectively addressed. With 201 attorneys now on staff, he said, “We are at the top of our game.” TECHNICAL EXPERTISE Those lawyers possess in spades what IP boutiques have long touted as their chief advantage, technical expertise. Attorneys at firms like Pennie & Edmonds generally possess undergraduate or even graduate degrees in the sciences or engineering. “We have 61 Ph.D.’s,” Normile said. “I don’t think any general practice firm can say that.” Perry said that depth of expertise should ensure a continuing competitive advantage to the larger IP boutiques. “If you have a huge litigation between, say, IBM and Microsoft, involving dozens of patents, that’s the kind of case that only the IP firms can do,” he said. One lawyer in the field who asked to remain anonymous said that advantage was countered by the greater and more varied experience most large-firm litigators can bring to the table. “At the boutiques, the top people are very good,” he said, “but they hog all the good work, so the associates and junior partners don’t get enough good experience.” But Marshall said he doubted big-firm general litigators could easily handle major IP cases, and he noted that arrogance had cost some in the courtroom. “I always liked seeing a general practice firm on the other side,” he said. “They didn’t know what they didn’t know.” Large firms do have an advantage, Marshall said, in the greater access they enjoy to senior executives at client corporations, with whom the big firms work regularly on major transactions. Michael A. Epstein, the head of Weil Gotshal’s IP practice group, agreed, adding, “Patent disputes are now multibillion-dollar disputes, and clients feel comfortable having the same firms who handle their other major litigations handle their patent disputes.” And revenue from diversified practices may give general practice firms the resources to attract even more talent from the boutiques over time. “The general practice firms do tend to do a little better in terms of profits,” Perry acknowledged. To Marshall, the challenges facing Pennie & Edmonds are clear, but the answer is also simple. “They need to raise their game,” he said.

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