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Last fall, partner Robert Feldman staged a beer bash for the litigation associates at Wilson Sonsini Goodrich & Rosati and invited firm Chairman Larry Sonsini. For many of the roughly 120 litigation associates, it was the first time they had seen Sonsini in the litigation group’s digs on California Street, located behind Wilson Sonsini’s main Palo Alto, Calif., headquarters on Page Mill Road. Feldman, the group’s chairman, welcomed the newly arrived first-year associates and launched into a litany of the big cases each of the partners was working on before turning over the floor to Sonsini. The event, and Sonsini’s appearance, was meant to be a morale boost for the associates, but the result may have been something different. “Larry made some comment that the artwork was better over here [than in the main building], as if he’d never seen it,” said one midlevel litigation associate, who spoke on the condition of anonymity. “It was pretty clear [the party] was a message to Larry that the litigation partners were working hard.” Several partner defections over the past year underscore the turbulence in Wilson Sonsini’s litigation group just as other firms, especially big national firms, are offering litigators opportunities to build new litigation practices for comparable pay. At Wilson Sonsini, corporate lawyers outnumber litigators by nearly 3 to 1. And as a group, litigation is shrinking. The firm has lost eight litigation partners in the past 12 months — roughly 18 percent of the partners in the group — and most of them went to other firms. Conversely, when Wilson Sonsini was bleeding corporate partners during the Internet boom years, it was losing them to in-house jobs with lucrative stock options packages. Departing litigation partners have gone to Howard, Rice, Nemerovski, Canady, Falk & Rabkin in San Francisco and the Valley offices of Seattle’s Perkins Coie and Chicago’s McDermott, Will & Emery. Former and current litigators at Wilson Sonsini say the firm’s emphasis on big-ticket patent disputes and securities litigation is too narrow to interest associates, the group is overly dependent on the corporate partners to drum up business, and Feldman can be a difficult and unfair manager. “The flow of work from corporate was determined by relationships, and if you didn’t have a relationship with corporate partners, you were dependent on Bob [Feldman],” said one former partner, who spoke on the condition of anonymity. A former associate, who also spoke on the condition of anonymity, said, “The corporate people really do view it as their firm; [they] view the litigation department as a service department.” Wilson Sonsini’s 150 litigators make up just 21 percent of its 703 lawyers, though they generate about 25 percent of the firm’s revenues. And that revenue percentage has been climbing in recent years. For one thing, the firm’s client base has matured and been embroiled in more disputes. And during the past two years, the demand for corporate work has been soft. For old-line San Francisco firms and tech firms with a large stable of litigators, like Brobeck, Phleger & Harrison, litigation has been a saving grace since the economy started to spiral and corporate work dried up. For his part, Feldman said he exerts little or no power over the other litigation partners and his job as chairman of the group is difficult to define beyond delegating the day-to-day responsibilities. “I’m a spokesperson for the department inside the firm and outside the firm,” Feldman said. “I communicate with firm committees on behalf of the litigation department, mostly informally and when someone sees a problem they think needs fixing.” As for personal criticism, Feldman said, “We’ve been trying to reward the key contributors, and some people have obviously disagreed with some decisions.” There’s evidence to suggest that Feldman’s “cheerleading,” as he calls it, has made inroads to earning recognition for litigators. As Wilson Sonsini divvied up the profits for 2001, litigators were among the partners with the biggest bumps. Wilson awards each partner a number of points, and each share of year-end profits is determined by both the number and the value of the points. One senior Wilson Sonsini litigator said the firm’s intellectual property litigators consistently got the largest increases in their points awards, with one young partner getting a 25 percent bump and another getting a 12 percent bump. And as Wilson Sonsini was doling out the associate bonuses, the firm announced it was rethinking its quarterly productivity bonus program. Because litigation associates are still busily billing, partners in the group lobbied to reinstate the bonus program, which awards a cash bonus to associates with unusually high billables in a given quarter. Donna Petkanics, managing partner of Wilson Sonsini’s operations, would not comment on specific compensation issues, but said that generally, “we take into account market factors and place value on areas of strategic market importance for the firm.” As for whether the litigation group exists to service the firm’s corporate clients, Petkanics said the firm’s lawyers are encouraged to drum up work consistent with the firm’s strategy regardless of whether the companies are corporate clients. When it comes to litigation, the firm’s primary growth areas are securities litigation and intellectual property and patent disputes. Wilson Sonsini’s litigators have carved a safe niche for securities work, and the firm defends a number of companies that aren’t corporate clients. But Wilson Sonsini has yet to become a go-to firm when it comes to lucrative patent fights. “There are quality litigators in the group,” said Edward Reines, a Weil, Gotshal & Manges litigator in Silicon Valley, “but they have traditionally not been seen as a destination for patent litigation work from clients who don’t otherwise have a relationship with the firm.” A big win in December may help change that perception. Wilson Sonsini represented Broadcom Corp. and Via Technologies Inc. in a patent suit filed against them by Intel Corp. Neither company had been a corporate client prior to the litigation. Since winning the case, the firm’s defense litigators have been called in two other big-ticket matters, Eastman Kodak Co. v. Sun Microsystems Inc., in New York, and McData Corp. v. Brocade Communications Systems, in Colorado. Both Brocade and Sun have been longtime Wilson corporate clients, but partner Michael Barclay credits the victory against Intel for helping the firm score the litigation from Sun, which had been using other firms for its patent disputes. At least one major case suggests the momentum was building already for Wilson’s litigation group. Last fall, the Paris-based Groupe Canal+ tapped Wilson to prepare a lawsuit against News Corp.’s NDS Group Plc. The suit, Groupe Canal+ v. NDS Group Plc, which alleges NDS helped in the counterfeiting of satellite-TV smart cards, was filed March 12 in San Jose, Calif. The firm’s growing emphasis on patent litigation has produced some tension, however. Kenneth Wilson, who left Wilson Sonsini last year for Perkins Coie, said his practice wasn’t always a fit with the firm’s strategic goals. “The practice was going more toward the big, highly leveraged cases and there was a lot of encouragement to focus on those types of cases,” Wilson said, “and here, I take what’s interesting.” Feldman downplays the idea that Wilson Sonsini has to choose whether to cater to corporate clients or to bag new ones through litigation. “It would be a stupid business plan to ignore our corporate clients, and it would be just as dumb to limit ourselves to them,” Feldman said. Still, associates like a broader range of litigation because it increases their chances of working in a courtroom. Feldman said he is negotiating with one large, non-tech company to send along its smallest disputes expressly so Wilson’s junior associates get a shot at more time in the courtroom. The litigator said Wilson Sonsini is also enabling its associates to work three-month rotations at the Santa Clara district attorney’s office to give them broader exposure to criminal matters. “The principal challenge here has always been to attract and retain the brightest lawyers in the country,” Feldman said. “Our success will be measured by how we do that.”

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