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The case of Frode Jensen III against his former firm, San Francisco-based Pillsbury Winthrop, presents a rare challenge of nailing down the multimillion-dollar damages of a blue-chip lawyer’s practice in mid-trajectory. Just after Labor Day, Jensen was a lateral transfer on his way to a $1.05 million-a-year job at Latham & Watkins in New York. But in a Sept. 4 “sour grapes” press release, Pillsbury declared that Jensen had been investigated for sex harassment and that his productivity had declined. The Latham job imploded within two weeks, and a $45 million breach of contract and defamation suit against Pillsbury was filed in Stamford, Conn., on Oct. 9. In the world of big-firm practice, merger-and-acquisition clients who would follow Jensen to a new firm would constitute his “book of business” — the rich dowry of a lateral hire. Defining the “book” that Jensen had, and is subject to losing, will be a central issue in the suit he has filed. By nature, this asset is an extraordinarily ephemeral and perishable commodity. FEEDING OFF FRODE Jensen’s complaint states that, from 1988 to 2001, his billings grew from approximately $1 million to “a peak of approximately $10 million,” and averaged over $5 million during the past six years. During several of those years, it states, Jensen’s “billings were the highest of any Winthrop partner in the firm.” One former Jensen colleague notes that any M&A work he brought in was prized business: “They realize that it would fill the plates of a lot of the people who work there — the litigators would have to look over pending litigation, employment lawyers would review those matters, the tax department would get involved, as well as the real estate people. It puts so many people to work.” The 52-year-old transaction specialist is known for his connections in biotech and venture capital circles, and for his involvement in initial public offerings. Specifically, Jensen worked in recent years on a major pharmaceuticals merger of the Swedish company Astra and Britain’s Zeneca Group. He also handled a de-merger of a joint venture between Astra and Merck & Co., of Whitehouse Station, N.J. His large and small clients, according to Securities and Exchange Commission filings, include Merck, Arena Pharmaceuticals Inc., Innovative Drug Delivery Systems Inc., Morgan Products Ltd., and Molecular Devices, of Sunnyvale, Calif. He has also represented BT Office Products (now Corporate Express), Dutch papermaker Buhrmann NV, Mercator Software, the Smith Corona Corp., and Silgan Holdings. According to former colleagues familiar with the established formula for calculating a partner’s billings, Jensen would be credited with the billings of all lawyers — partners and associates — who worked on projects that he attracted. RECENT BILLABLES DOWN Companies that routinely engage in the acquisition or divestiture of holdings are one major segment of a M&A lawyer’s “book.” But other significant factors apply. Relationships with investment bankers and other third parties that lead to referrals can be as important to an international M&A practice as connections with the local banks are to a small-town real estate lawyer. A third factor, cited by a New Haven, Conn., dealmaker, is the degree to which the lawyer knows the competition — other lawyers — in his or her field of expertise. As a matter of law, ethics and etiquette, whether a client follows a departing lawyer is purely the client’s decision. Nevertheless, it would be an ethical breach for a lawyer to inquire, prior to leaving, whether a client will leave with him or her. The same applies for any associates who might be sought from the old firm. Since Jensen never became established at Latham, whom he would bring with him is not a question he, personally, could explore. Interestingly, two lawyers note, Latham has no such restriction. Due to a sluggish economy, and mergers and acquisitions among his clients, Jensen’s last year at Pillsbury was not his best, by multiple accounts. But one year does not a track record make, notes a corporate partner of a law firm in Hartford: “If a horse has a good record of winning in the past, that’s a good indication he can do it again.” Pillsbury is geared for a battle, and has retained former Manhattan U.S. Attorney Mary Jo White, of New York-based Debevoise & Plimpton, to handle the defense. But none of the lawyers interviewed for this story say a victory in court — some three to five years hence — would truly vindicate either side. William Narwold, managing partner of Stamford, Conn.-based Cummings & Lockwood, was a partner of Jensen’s in the late 1980s and considers him a highly competent professional, without blemish. “The nature of this business is, for a significant producer like him, those [client] relationships have to be serviced every day, and have a pretty short half-life,” Narwold says. “My guess is that the ability to maintain those over the long haul is going to be very difficult. “It’s incredible. Everybody should have sat down and not gone through this public war,” Narwold adds. “My guess is that he will land with another major firm when this dies down, which would limit the damages somewhat.” But if he doesn’t, “it will be a significant issue,” Narwold predicts. Marcus Wilkinson, who heads the M&A group at Hartford-based Shipman & Goodwin, says that Jensen’s landing with a new firm, and attracting old clients, could actually both aid his career in the short run and demonstrate the portability of his clients for his case against Pillsbury.

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