Ropes & Gray confirmed this week the details of a spin-off of its patent prosecution practice, a landmark move unveiled by the firm in early March.
Haley Guiliano, a boutique firm specializing in patent prosecution and other intellectual property work, will officially separate from Ropes & Gray on Aug. 1. Joseph Guiliano, co-head of Ropes & Gray’s IP rights management practice in New York, and senior counsel James Haley Jr., a biopharmaceutical and life sciences expert, will be the new firm’s two name partners.
Shvarts & Leiz, a small shop formed in 2011 by former Ropes & Gray lawyers Alexander Shvarts and James Leiz, will then merge with Haley Guiliano. Shvarts & Leiz has offices in Wayne, New Jersey, and San Jose, California, the latter of which will be absorbed into Haley Guiliano, which will also have offices in New York and London, said Guiliano on Tuesday from the British capital, where he was scouting for office space.
Patricia Hickey, a former director of finance at global accounting giant Ernst & Young, has been hired to serve as Haley Guiliano’s CFO. The firm, which registered its new domain name in late May, will also move into new physical space in New York by late August.
Guiliano said Haley Guiliano has agreed to lease about 20,000 square feet of space at 75 Broad Street in downtown Manhattan. Ropes & Gray, which is already subleasing space at its New York headquarters to Fenwick & West, will continue to provide office space to Haley Guiliano for a short period of time as the new firm builds finalizes its real estate footprint in the city.
Shvarts & Leiz, besides its two name partners, also includes associate Maxim Rapoport and a technical adviser. Guiliano and Haley said that the three lawyers at Shvarts & Leiz will become part of Haley Guiliano, which expects to have roughly 30 legal employees at its inception. Those individuals include lawyers, as well as technical advisers and patents agents, many of whom attend law school at night and are later hired as attorneys after they graduate, Guiliano said.
Haley (pictured right), cited Guiliano as an example, and noted that in their practice group some former patent agents eventually have risen through the ranks to become partners themselves. Haley Guiliano will employ another 35 to 40 support staffers, most of which will be based in New York, Guiliano said.
Other Ropes & Gray lawyers joining Haley Guiliano include partners Jeffrey Ingerman in New York and Richard Feustel Jr. in East Palo Alto, California, where Feustel serves as head of the firm’s Silicon Valley IP rights management engineering practice. Guiliano said that while he and many of his new firm’s lawyers focus on work for technology clients, Haley will bring much-needed expertise in the biomedical device and biotechnology sector, something the two hope will create a more diversified IP practice.
A Ropes & Gray spokesman said that after Haley Guiliano’s separation later this summer, the Am Law 100 firm will have about 100 lawyers working in its IP group, a practice that will now focus on IP litigation, IP transactions and IP rights management work. Patent prosecution is the only section of IP expertise that Ropes & Gray will no longer offer clients.
Earlier this year, Ropes & Gray cited the changing needs of clients and shifting costs in the IP space—caused in part by the creation of the Patent Trial and Appeal Board as an alternative to litigation in federal district courts—as necessitating a restructuring of its IP practice. The decision by the firm to cease doing patent prosecution and procurement work was a landmark move by Ropes & Gray, which in 2004 absorbed storied IP firm Fish & Neave.
That merger marked the start of a period that saw large, general practice firms increasingly enter the IP arena, often by taking on groups of lawyers from IP-specific firms, either through lateral raids and acquisitions or combinations both big and small. While that trend has continued—last year saw Andrews Kurth absorb Kenyon & Kenyon and Polsinelli pick up the bulk of dissolving IP super-boutique Novak Druce Connolly Bove + Quigg—the standalone IP shop never truly went away, despite a recent spate of small firm acquisitions.
James Batchelder, an IP litigator and member of Ropes & Gray’s policy committee who joined the firm in 2011 from now-defunct Howrey, said that in recent years most major firms have downsized their IP practices as a result of shifting market forces caused by the rise of PTAB proceedings and the U.S. Supreme Court’s 2014 ruling in Alice v. CLS Bank International, which narrowed and clarified the scope of what can be considered patentable subject matter.
Batchelder was unable to state whether or not Ropes & Gray would be letting go of any lawyers or staffers as a result of the reorganization creating Haley Guiliano. “It’s certainly our hope that everyone finds a home,” said Batchelder, who serves as managing partner of Ropes & Gray’s San Francisco and Silicon Valley offices.
Edward Black, the Boston-based co-head of Ropes & Gray’s IP transactions group, said that his clients have praised the spinout of Haley Guiliano as the “best of both worlds” for each firm. Haley Guiliano will have a lower-cost infrastructure allowing it to better serve its clientele, Black said, noting that Ropes & Gray will continue to work closely with its soon-to-be-former colleagues. “We’re all still on the same team, even if in a more informal way,” he said.
Black noted that having handled hundreds of spinouts on behalf of corporate clients, some had joked that he finally realized it made sense to do one for his own firm. Batchelder, a former name partner at IP boutique Day Casebeer Madrid & Batchelder, which was acquired by Howrey in 2009, said that he wouldn’t be surprised to see other large firms undertake similar initiatives.