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Novak Druce Connolly Bove + Quigg senior partner Jeff Bove said the firm faced some post-merger challenges in 2013, but new clients and geographic diversity have the firm well prepared for success in the upcoming year.

“The merger has met our expectations to date,” Bove told Delaware Law Weekly. “In fact, our level of business has consistently risen over the last nine months, which, of course, is a very good thing.”

Roughly one year has passed since Wilmington’s Connolly Bove Lodge & Hutz merged with Houston’s Novak Druce + Quigg to create what Bove described as a “super intellectual-property boutique.”

Prior to the merger, Connolly Bove was impacted by several events, including the departure of the firm’s 20-attorney commercial litigation unit that left to launch its own firm, Connolly Gallagher. Connolly Bove was also hurt by a reduction in patent litigation by one of its biggest clients, drugmaker Pfizer. The patent for the cholesterol-lowering drug Lipitor expired in November 2011, allowing generic manufacturers to replicate the drug’s compounds.

Several intellectual-property attorneys left the firm prior to the merger’s completion. Thomas McWilliams, Edward “Ted” Behm, Michael Berman and Jefferson Cheatham joined Barnes & Thornburg in late 2012. Mary Bourke joined Womble Carlyle Sandridge & Rice in October 2012 and brought four former Connolly Bove attorneys to her new firm.

Chad Stover joined Barnes & Thornburg in October 2013, the firm’s only post-merger departure.

Bove said the firm’s troubles are in the past, noting that the merged firm has landed new clients over the past few months. He declined to name the clients, but described some of the companies as “large, multinational corporations in high-tech fields.” The firm has grown 5 percent per month over the last three to five months, according to Bove.

Traditionally, Novak Druce has represented software and technology clients, while Connolly Bove was known for biopharmaceutical and mechanical companies. The combination of the two firms has diversified their client base, Bove said.

The new clients have brought a mix of patent prosecution and litigation work to Novak Druce, according to Bove. Patent prosecution currently accounts for roughly 70 percent of Novak Druce’s business, but Bove hopes to have the firm’s work split evenly between prosecution and litigation.

“My goal is to have Novak Druce at 50-50 patent and litigation,” Bove said. “I truly believe it is obtainable at Novak Druce given the firm’s location in very active litigation venues and its reputation. Anything less than that, to me, is not successful.”

Bove said that Novak Druce plans to serve the new clients by expanding the Wilmington office by an additional 25 percent, but there is no set timeline for the expansion. He added that it depends on when they are able to line up good candidates. The firm is looking at hiring both individual attorneys and groups, Bove said.

“We are open to discussions with any quality attorneys,” he said. “While we have, in the past, used recruiters at times, our firm’s reputation is attracting some talent on its own. If a small group came to us, we would look at it, provided that they wish to be part of an IP boutique.”

In fact, Bove said that he would welcome the return of any former Connolly Bove IP attorney.

“If any of them have any regret, we sure would love to have them back,” he said.

Bove did concede that the firm has had some merger expenses that it had to absorb in the first year, but said the firm met its revenue projections when the separate financial tracks of Connolly Bove and Novak Druce combined Jan. 1.

“I am very happy with how the financials turned out,” he said. “The thing was not to hit a grand slam in the first year, but to absorb merger costs. That’s what we’ve accomplished. The billings and work value have grown steadily over the last six months. That tells us our business model is working.”

One such expense that plagued the firm post-merger was vacant office space in Washington, D.C. When the two firms combined, they both had their own Washington offices. Novak Druce’s Washington attorneys were relocated to Connolly Bove’s office, leaving the firm with empty real estate, a high rent and difficulty subleasing the space.

Bove said that the excess office space will not be an issue for the firm much longer.

“I’m extremely optimistic that our extra office space will be appropriately addressed immediately,” he said. “I have personally been addressing the lease situation and I’m very pleased with the direction at this time.”

A key to Novak Druce’s future plans is its presence in the top intellectual-property jurisdictions throughout the country. In addition to Wilmington and Washington, the firm has offices in Silicon Valley, Los Angeles and Houston. Prior to its merger with Connolly Bove, Novak Druce opened a Boston office.

“We are covering the epicenters of patent litigation,” Bove said. “I wanted Silicon Valley and Boston offices for years at Connolly Bove. When the opportunity came along to combine our firm with the venues, I was very pleased and excited.”

In recent years, intellectual property boutiques have struggled a bit due to the competition on the patent prosecution side from full-service firms, according to legal analysts. Woodcock Washburn, a Philadelphia intellectual-property boutique, last week completed its merger with Cleveland’s Baker & Hostetler, which offers clients a full range of services. As patent prosecution work becomes more lucrative, boutiques have felt pressure to join traditional law firms.

Bove said the “super boutique” model keeps their firm competitive with full-service firms.

“You have a midsized firm with broad-based technology offerings that specializes only in intellectual property,” he said. “If we were just a Delaware firm or a 10-to-20-person law firm, it would be a tough competitive landscape.” 

Jeff Mordock can be contacted at 215-557-2485 or jmordock@alm.com. Follow him on Twitter @JeffMordockTLI.