Howrey Simon's Hope

All of a sudden, Howrey Simon Arnold & White is on the map in the San Francisco Bay Area. The firm made a big splash last month when it hired top patent litigator Henry Bunsow from Keker & Van Nest to launch its new outpost in San Francisco. It’s now aggressively recruiting other attorneys to fill out the office. Initially staffed with 10 attorneys from other outposts, Howrey Simon expects to have 30 lawyers sometime next year. Forged from the merger of antitrust firm Howrey & Simon and IP specialist Arnold White & Durkee in February 2000, the Washington, D.C.-based firm divides its practice between intellectual property, antitrust and global commercial litigation, with 80 percent of its work focused on litigation. That strategy, Howrey Simon says, gives it a sound base and the ability to attract top talent and big-ticket litigation. “Having three major practice areas — which each generated more than $100 million last year — provides tremendous stability for the firm,” said Managing Partner Robert Ruyak. Howrey Simon faces intense competition from a host of other firms that are doing exactly the same kind of work. Nevertheless, the firm thinks it has a model that might set it apart from the pack by focusing exclusively on three practice areas. And it doesn’t hurt to hire a few marquee partners. Aside from Bunsow, Howrey Simon snared Q. Todd Dickinson when he stepped down as director of the U.S. Patent & Trademark Office. And it hired Roger May, head of Ford Motor Co.’s IP and IP asset management subsidiary, to head Howrey Simon’s own recently launched IP consulting subsidiary. Howrey Simon already has 50 attorneys in its Menlo Park, Calif., office, but decided to move into San Francisco to tap the local talent. For the same reason the firm opened shop last year in Chicago. It also opened offices in London and Brussels in the past year and has hired a slew of laterals. Howrey Simon sees itself as offering the resources of a general practice firm, with the concentrated focus of a boutique. “Big full-service firms have to manage growth in a supermarket environment where they offer everything,” said Dickinson, who will be splitting his time between the firm’s D.C. and San Francisco offices. “While boutiques face the issue of whether they have sufficient resources to staff complex cases and whether they are well known at the general counsel level.” GROWTH STRATEGY Last week, Ruyak, Bunsow, Dickinson and John Lynch, a partner in Howrey Simon’s Menlo Park office, discussed the firm’s strategy at the firm’s new digs. Located on the 36th floor of 525 Market, the lobby offers a panoramic view of San Francisco Bay. The surroundings highlight Howrey Simon’s growth from 1990, when it had a single office in Washington, D.C. Combining with Arnold White gave Howrey Simon the added practice depth and attorney count it needed for further expansion. Since the merger the firm has hired several groups of laterals, including 35 antitrust attorneys from the Washington, D.C., firm then called Collier, Shannon, Rill & Scott; about a dozen litigators from Howard, Rice, Nemerovski, Canady, Falk & Rabkin; 30 litigators from Los Angeles’ now defunct Troop Steuber Pasich Reddick & Tobey; and seven antitrust lawyers from Chicago’s Katten Muchin Zavis Rosenman. Howrey Simon’s 10 offices also give the firm national and international reach. Last year it opened outposts in Chicago and London, and in June it opened an office in Brussels. The 12-attorney London office focuses exclusively on IP while the 18-lawyer Brussels office deals with antitrust and competition matters. The growth spurt has occurred in the midst of a stormy economy, which doesn’t seem to have rocked Howrey Simon the way it has other firms. The firm had gross revenue of $292 million in 2001, a 21 percent jump from the previous year, and profits per partner of $760,000, a $10,000 dip from 2000. While Howrey Simon ranks as a go-to firm for IP matters, it has a lot of company. In Recorder affiliate IP Worldwide magazine’s recent survey of general counsel at the Fortune 250, Howrey Simon was mentioned most frequently as being one of their primary IP firms. In another IP Worldwide survey, it ranked No. 5 in number of patent cases it brought in 2001 and tied with several firms for eighth place for the number of cases it defended. By comparison, Fish & Richardson ranked first on both the defense and plaintiff sides, taking on a total of 70 cases last year. And general practice firms like Kirkland & Ellis; Jones, Day, Reavis & Pogue and Morrison & Foerster either topped Howrey Simon or came close in the number of cases they pulled in. CHANGING MARKET The growing competition among firms for such work has changed the landscape for IP firms. Several mid-size firms like Limbach & Limbach, Lyon & Lyon and Flehr Hohbach Test Albritton & Herbert have gone out of business or merged with general practice firms. And others are pondering whether they too might benefit from a merger. New York’s Pennie & Edmonds is in merger discussions with Cooley Godward, and New York-based Fish & Neave recently had some initial discussions with Wilson Sonsini Goodrich & Rosati that were ultimately dropped. “The way IP litigation is parceled out by clients has changed dramatically,” said Paul DeStefano, a partner in Pennie & Edmond’s Palo Alto office. In the past, he said his firm’s patent prosecutors brought in litigation work based on their relationships with chief inhouse patent counsel. Likewise, he said general practice firms got new business through their interaction with a company’s board of directors. “Now we’re competing based on the skills of IP litigators,” said DeStefano, who years ago was chief legal officer at Genentech Inc. “It’s a different paradigm.” Fish & Neave is also open to marriage. Norman Beamer, a partner in the firm’s Palo Alto office, said that while no merger discussions are currently under consideration, it’s “certainly something that could conceivably happen.” Among other marquee IP firms, Fish & Richardson and Finnegan, Henderson, Farabow, Garrett & Dunner said they intend to remain independent. “Our present thought is that we’re very strong on our own,” said Peter Devlin, Fish & Richardson’s firmwide managing partner. Instead of becoming a general practice firm, he said Fish & Richardson has begun to expand into corporate and general litigation. The firm opened a Dallas office two years ago with attorneys from a general litigation firm and subsequently brought in a few corporate lawyers. Its New York and San Diego offices have since added corporate lawyers. Finnegan, Henderson decided against expanding its focus beyond IP. “We’ve discussed other areas from time to time and felt what we do best is IP,” said C. Lawrence O’Rourke, a partner in Finnegan’s Palo Alto office. As to a merger, he said that although the 320-attorney firm has been approached at least a dozen times it’s never considered hooking up with another outfit. Townsend and Townsend and Crew says that like Howrey Simon, it has benefited from the 1993 union of Townsend, an IP outfit, and antitrust boutique Khourie Crew & Jaeger. “In this marketplace it’s important to be of sufficient size and depth and girth to compete with firms entering the IP field,” said Townsend Chairman James Gilliland. Bunsow said Howrey Simon’s size and depth of resources, as well as its concentration on a few practices, is what drew him to the firm. He sees it as similar to the Keker firm, only bigger. Bunsow is continuing to work with Keker as co-counsel on a half-dozen cases pending when he left the firm and has talked with Keker about working together in the future. “We are in a position to complement each other,” Bunsow said. “We have the capacity and capability that is attractive, which in some cases they need.” John Keker said he looks forward to working together with Bunsow on selected cases, but he dismissed the notion that Howrey Simon has a leg up because of its size. “People come to us when they think they are going to trial,” Keker said. “I think we are better than anyone at trying a case. Our record speaks for itself.” Having more than five to 10 lawyers on a case is inefficient, he said. It’s like Paul Newman facing James Mason in the movie The Verdict, he added. “Having scads of people at your disposal can get in the way.” Keker led the trial team — which included Bunsow — that successfully defending Genentech in a patent infringement suit by Chiron Corp. Harold McElhinny, a partner at Morrison & Foerster who represented Chiron in the case, said general practice firms like MoFo benefit from having a corporate side. “The business departments provide the source of most litigation business,” McElhinny said. “Working with a strong business department has been the key to the success of the firm and my own personal success.” Howrey Simon, however, says it doesn’t need a corporate practice to bring in work since clients are drawn to the firm because of its attorneys. “Lawyers have to stand on their own history,” Ruyak said. “That’s why we have Henry Bunsow. His relations are directly with clients. He’s well known for trial work.” And the firm clearly plans to hire more top talent. “We need to be larger than we are now — we’re thinking near 700 to 800 lawyers,” Ruyak said. “We continue to recruit and grow the practice where we find talented people.”