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In the midst of what’s supposed to be a summertime slowdown, corporate lawyers in Silicon Valley are finding they don’t have much time for golf. Instead, they’ve been stuck in the office, cheerfully coping with what appears to be a steady rise in corporate work. (See chart: M&A Deals). “It’s definitely busier than it was last year,” said Michael Kennedy, a mergers and acquisitions partner at Wilson Sonsini Goodrich & Rosati. “It’s part of the cycle — things go up, they go down, but they don’t stay where they are.” Kennedy was celebrating Friday the closing of PeopleSoft Inc.’s purchase of his client J.D. Edwards & Co. That deal was threatened by Oracle Corp.’s hostile bid for PeopleSoft. “We were in a position where we were extremely vulnerable and at the mercy of Oracle,” Kennedy said. “It is quite an awesome result for J.D. Edwards.” And he’s not the only one feeling more positive. Numbers compiled by Thomson Financial Securities Data show that mergers and acquisitions activity is up sharply at many of the San Francisco Bay Area’s larger corporate firms. Orrick, Herrington & Sutcliffe, Wilson Sonsini, Latham & Watkins, Gray Cary Ware & Freidenrich and Fenwick & West are all showing increases in deal volume of 35 percent or better. In the first half of 2002, for example, Gray Cary handled 18 M&A deals. In the first half of 2003, the firm has had a hand in 26 transactions. Diane Holt Frankle, a Gray Cary partner, said that based on current activity, the rest of the year looks busy as well. “Companies that are holding off on an M&A transaction are getting to the point where they’re ready to do a deal,” Frankle said. A few players are showing a decline in work. Pillsbury Winthrop’s deal total during the first half of the year is off 86 percent from the same period last year. But most are holding steady or climbing. Over the last several weeks, Silicon Valley lawyers have begun to climb out of the pessimism they’ve felt over the past few years about the state of their practices. It’s not an avalanche of work compared to the halcyon days of the Internet boom — but it’s a start. The uptick in M&A work isn’t the only sign of an improvement in corporate activity. Venture capitalists also seem to be waking up and pumping more cash into new companies. Richard Millard, a partner at Weil, Gotshal & Manges in Redwood Shores, said he’s done about a dozen venture financings in the first six months of this year. He said that’s about the same number he did in all of 2002. “Funds sitting on money can only sit on the sidelines for so long,” Millard said. On the M&A front, deal negotiations appear to be moving further along than last year, when Millard said he saw about a dozen deals break apart. “There were a lot of deals in the last year where you got into them and turned over the rocks, and the companies weren’t as healthy as they appeared,” Millard said. Increased optimism appears to play a role as well in generating the flow of business activity, he said. “I think a lot of it has to do with confidence and perception,” Millard said. “Maybe the worst of things are behind us.” Related chart: M&A Deals

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