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Woodcock Washburn has been Philadelphia’s largest intellectual property boutique for the better part of the past two decades. Its prominence has grown in recent years as two of its chief competitors — Panitch Schwarze Jacobs & Nadel and Seidel Gonda Lavorgna & Monaco — merged into large firms. That has left Valley Forge, Pa.’s Ratner Prestia as the second largest local IP firm. Now the 28-attorney firm must deal with the retirement of one patriarch, Alan Ratner, and the planned phasing out of the other, Paul Prestia, from management duties. Like many other boutiques, the question remains whether the firm can survive and thrive past its first generation. Or will the lure of merging into a large firm prove to be too tempting? Prestia, 67, chairman of the four-person management committee, said the firm has fielded many offers from large firms in the past but has never found the right fit. He added that the firm has planned for Ratner’s retirement — which became effective Feb. 1 — for quite some time, as the 71-year-old stepped down from management duties more than five years ago. With that, a younger group of partners is being integrated into the leadership of both firm management and practice marketing. “I would like to get out of the management side of things within two or three years,” Prestia said. “It should be pretty transparent and have little or no impact. I am already working on turning over the marketing database. And that’s the key because I have been the face of the firm for a long time.” Ratner Prestia lost two partners, Kevin Casey and Kevin Goldstein, to Stradley Ronon Stevens & Young last fall. Casey was on the management committee while Goldstein was being groomed to run the firm’s Wilmington, Del., office. And at a firm that is heavy on patent prosecution, the pair was viewed as two of the firm’s top litigation partners. In addition, the firm lost two associates in the last year. Partner Jacques Etkowitz, 51, quickly replaced Casey on the management committee, handling human resources. He joins Kenneth Nigon, 53, and Benjamin Leace, 41, on the committee. Nigon deals with practice management while Leace is responsible for facilities and technology. Along with Ratner, veteran partners Costas Krikelis, 67, and James Simmons, 69, have both retired from the partnership to take counsel positions. And Prestia said young partners are now servicing many of the firm’s major clients. Lawrence Ashery, 42, spearheads representation of Japanese-based Matshusita, the parent company of Panasonic. And while counsel Robert Seitter expanded the firm’s relationship with ITT when he retired as an in-house counsel a few years ago, Prestia said new partner Rex Donnelly, 38, is the primary lawyer servicing the communications company. He added that two of the biggest new clients lured in over the past year or so were generated by younger lawyers. Alan Ratner and Paul Prestia joined forces in 1981 in what seemed like a perfect union. Ratner began his career at what is now Woodcock Washburn after graduating law school in 1959. Prestia spent the first years of his career at Paul & Paul. Ratner built an electrical practice while Prestia had a chemical practice. The two had opened their own offices in the western suburbs when they decided to forge a partnership before the IP boom of 20 years ago. Ratner, who will stay with the firm as of counsel, said large, full-service firms were not yet engaged in the IP practice. He said the biggest change in the IP practice was when large firms discovered that IP litigation could be a serious profit center and began competing for that work. But Ratner said he has seen many mergers between IP boutiques and large firms fail because the acquirers do not understand patent prosecution work. “The basic business problem is that it’s tough for a general firm to understand the business and practice model of patent prosecution work,” Ratner said. “There is a lot more volume, a lot more clients and that brings with it a different billing structure. It’s not as profitable as the litigation work.” That, coupled with cultural differences, has kept Ratner Prestia from merging, Ratner said. “You have to remember that back when we started the firm, 15 lawyers was a really big IP firm,” Ratner said. “So I had no idea we would be as big as we are. But we did know that we wanted a certain culture, one with an entrepreneurial spirit and a good quality of life. “I think the attitude has always been that people liked the firm as is. None of the large firms have the same culture as we do and I don’t even think that our peers [at other IP boutiques] do. And you can’t have two competing cultures at the same firm. And the acquirer has always been more bottom-line oriented.” Ratner Prestia is not the only IP boutique that has weighed the merits of independence against the security of merging. Caesar Rivise Bernstein Cohen & Pokotilow’s longtime managing partner Manny Pokotilow has faced some of the same issues. His firm has grown by nearly 10 lawyers in the past three years to 26 lawyers. Of the 14 partners, seven hold equity status. He said there have been several stumbling blocks when full-service firms have approached Caesar Rivise about merging. “I would say three of us would have no problem billing the hours that a large firm would want out of a partner,” Pokotilow said. “But there are four that wouldn’t want to do that. We have people here who might bill 1,200 hours but they are really valuable because of their experience. Also, I’m 66 years old and I don’t want anyone telling me that I have to retire. The other thing is the income fit. I would be making more than many of the top partners, and that probably wouldn’t sit well.” Unlike Ratner Prestia, Pokotilow said his firm has a majority — 15 lawyers — who primarily act as litigators. One would argue that where large firms are providing the most competition to IP boutiques is on the litigation side. Pokotilow, though, says the firm has been able to find its niche with a simple marketing pitch. “The reason we are able to compete is that we offer good results at a reasonable rate,” Pokotilow said. “I would say we have the largest group of IP litigators in town, so we can handle big cases.” Prestia said he recognizes that Ratner Prestia must have a clear vision for a future as a freestanding IP boutique equipped to deal with a more competitive marketplace. He said the management transition to a new generation shows a commitment to that goal. He said the firm would like to build its litigation side but does not feel as if it must match up with those at other firms for ultimate success. “Patent prosecution is definitely our strong suit and it requires a technical depth with people who have been in the industries they now represent,” Prestia said. “Sure we would like to build up the litigation side but you can’t omit the middle either. Counseling work, where we help clients develop business strategies, has really taken off as well.” But in an age where the size of clients has grown with his firm, Prestia admits that corporations are interested in one-stop shopping for their IP needs. “Larger companies are more likely to want larger firms to handle the big-ticket litigation,” Prestia said. “So what we are doing is increasing the amount of middle-market work. The only way to get a piece of the big-ticket litigation work is to partner up with a large firm. And we plan to pursue that, though there is a problem with conflicts.” Prestia said he would like to see the firm continue to grow to between 40 and 50 lawyers over the next five years — growing at a pace of three per year. He would like to see the firm grow in Wilmington, where he thought there would be a boon for litigation but instead has provided more opportunities in the prosecution and counseling side. Donnelly has replaced Goldstein as managing partner of that office. He would also like to see the firm’s personnel leveraged with an increase in patent agents. The firm currently has three and would like to add several more. “Their billing rates and compensation are not too different than young associates and they are just as competent, sometimes even more so,” Prestia said. As for its suburban location, Prestia said because the firm’s local clients are spread throughout the region, he and Ratner never saw the need for opening a Center City office. Some local IP lawyers believe Prestia might eventually come to the conclusion that his firm would be better served in the long term by merging with a larger firm. They point to the decision made by Arthur Seidel when he merged the firm he started into Drinker Biddle & Reath four years ago. But Prestia does not seem close to reaching that viewpoint. “We are approached regularly and we’re very much aware that things could change,” Prestia said. “But we still believe there is a place in the market for IP expertise that is more focused than what you can get at a large firm. We have never seen the need. I don’t think a lot of those mergers have worked out too well for the IP firms and I think we are happy being who we are for now.”

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