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After a little less than three years as general counsel of the roller coaster known as Verticalnet Inc., Jim McKenzie has rejoined Morgan Lewis & Bockius as a partner in its business and finance department. In January 2000, McKenzie withdrew from the firm to become executive vice president and general counsel of Verticalnet, a longtime client that was looking for in-house counsel to assist with a large number of transactions it had planned. McKenzie said that when he joined Verticalnet, the company was growing exceptionally fast, completing two or three acquisitions a month, plus a healthy helping of joint ventures and international work. So he spent his first year on the job handling the transactional work he was trained to do. Verticalnet, established in 1995, operated industry-specific business-to-business Web sites through joint ventures worldwide. In the first two months of 2000, Verticalnet reached into Europe and Japan, announced fourth-quarter figures, which exceeded expectations, and offered a second two-for-one stock split. But that all changed with the drastic decline of the venture capital world in early 2001, which brought financial hardship for Internet companies like Verticalnet. The company quickly shifted gears and began to sell off all of the Internet businesses it had acquired during the preceding boom years. Verticalnet did acquire one company last year, Malvern, Pa.-based software producer Atlas Commerce, which began its shift from business-to-business Internet to enterprise software company. Verticalnet sold off its remaining Internet businesses and completely restructured the company, which went from 1,800 to 100 employees in the process. “I’ve spent the last year and a half restructuring the company,” said McKenzie, who rejoined Morgan Lewis earlier this month. “And what I went there to do was handle transactions, which they are not doing anymore. So with the restructuring basically complete, I looked at coming back to Morgan Lewis. “The way I look at it, I never really left Morgan Lewis; I just went to Verticalnet. It’s not like I was trying to get out of here. I just got a really good offer. While we were doing the restructuring at Verticalnet, I had a lot of people telling me about different opportunities, but I was always interested in coming back to Morgan Lewis. And Morgan Lewis always told me not to go anywhere else without calling them first.” Most law firms, even those with prestigious venture capital practices such as Morgan Lewis’, are not exactly beating down the doors of dot-com general counsel with little or no existing business. But Morgan Lewis Philadelphia office managing partner Howard Meyers said McKenzie’s diversity of experience makes him an extremely attractive commodity regardless of the book of business he brings. “When he was here before, he didn’t just handle high-tech clients,” Meyers said. “He also handled more established, industrial clients like utilities. His appeal is only enhanced by handling sophisticated deals and then restructuring work for a high-profile company. … We have a heavy transactional load here how. And while certain sectors of the economy are more active than others, there’s still going to be a lot for him to do.” McKenzie anticipates handling transactional work for both institutional and venture capital clients. After he graduated from the University of Pennsylvania with a dual law/M.B.A. degree in 1987, McKenzie joined Morgan Lewis and handled institutional clients for people like Meyers, business and finance department chairman Howard Shecter and partner Jeffrey Klauder (now GC at Safeguard Scientifics). But with the arrival of venture capital lawyer Steve Goodman in 1995, he said he was lent out to that group, which also including biotech business magnet David King. While he doesn’t bring with him an instant client base like most lateral hires, McKenzie said he does have some contacts from which to work and can pitch in with existing work on both the institutional side — where he anticipates spending much of his time — and the venture capital side. While Goodman’s forte is working with venture capital clients during the startup phase, McKenzie enters the picture to assist with legal problems that crop up later in the company’s evolution. “I’ve had time to see things from the other side and I think that perspective will be helpful to me and the firm,” McKenzie said. “I have no regrets [about going to Verticalnet]. I almost view it as a corporate clerkship. David King once told me that starting his career as a bankruptcy lawyer made him a better venture capital lawyer because he could anticipate the problems that would occur down the road. So while it was really rough at times [at Verticalnet], it was a great experience.” McKenzie will be replaced as Verticalnet GC by Christopher Kuhn, an executive already with the company.

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