When Daralyn Durie and Ragesh Tangri left San Francisco’s Keker & Van Nest to start their own firm, they weren’t alone. It was 2009 — the height of the recession. Attorneys across the country, recognizing opportunities in the new economic climate, had decamped from bigger law firms to try their luck at more entrepreneurial ventures.
Nearly three years later, Durie and Tangri have expanded their San Francisco firm, Durie Tangri, to 15 lawyers. Many of their clients are holdovers from their days at Keker, including Genentech Inc. and Google Inc., but the firm has lured additional clients by offering alternative billing options and lower hourly rates.
Last year, the firm scored numerous pretrial victories, many on summary judgment.
“We had what we thought in 2011 was a great year, and exceeded our own internal budgeting,” Durie said. “When we left Keker, we intended to make less money than we had been making. But I think, for what we needed to accomplish, we consider our performance to be very strong.”
Durie and Tangri are former classmates at the University of California, Berkeley School of Law, where they graduated during the early 1990s. They were joined by two more former classmates and Keker colleagues, Michael Page and Mark Lemley, the latter the director of the Stanford Program in Law, Science and Technology.
With 10 partners, the firm limits its associate ranks. The partners intend to grow — but not too much. Durie anticipates reaching 20 lawyers in a few years. “It’s not possible to stay the same size, but we certainly could be growing a lot more quickly than we are,” she said. “The point was to be somewhere smaller.”
About 60 percent of Durie Tangri’s work focuses on patent litigation. The rest comprises class action defense and other litigation for technology companies.
Like many other boutiques, Durie Tangri aimed at providing flexible billing options. “We saw a sweet spot when we left of trying to think about how to handle, in particular, certain kinds of IP cases on a different cost model,” Durie said. “A lot of clients were frustrated that work gets done on an hourly basis, but it was hard for them to evaluate what they’re getting for that work.”
About one-third of the work is billed on a flat fee, often based on reaching a set stage of the case such as summary judgment, or monthly. Durie estimated those rates in the $40,000 to $60,000 range.
On Jan. 20, 2012, in a case charged on a flat fee, the firm won a summary judgment ruling for Yelp! Inc. The case had ramifications for several of the firm’s clients, including Netflix Inc., Ticketmaster LLC and LinkedIn Corp., which had been separately sued over the same patent.
“In a patent case, you can get a judgment of noninfringement, which is specific to a particular company, or a judgment of invalidity, which protects everyone,” Durie said. “In a case like this, where you’re representing many defendants, what you want sometimes is invalidity. With a rifle shot, with one thing, you can win the case across the board.”
LOWER HOURLY RATES
Hourly rates, when used at Durie Tangri, are low compared with larger competitors; partners bill at $495 to $650, Durie said.
Those rates attracted David Mussman, executive vice president and general counsel of West Corp., which has retained Durie Tangri in three patent infringement cases. West Interactive, a subsidiary of West Corp. that provides interactive voice customer-care services, faced infringement claims by Phoenix Solutions Inc.
Phoenix previously had sued DirecTV, which did business with West Interactive, over the same patent. That case was thrown out on summary judgment, but Mussman balked at hiring Bartlit Beck Herman Palenchar & Scott, which won that case. “The case value was less, and Bartlit Beck does only cases on fairly large fees,” Mussman said.
Since the Phoenix Solutions lawsuit, West Interactive has retained Durie Tangri in two additional cases.
Durie Tangri enjoyed a round of victories in 2011. One of the most significant involved Guidewire Software Inc., which was defending infringement claims brought by competitor Accenture Global Services GmbH over two patents on methods used in insurance software.
The case resulted in one of the first interpretations of the U.S. Supreme Court’s 2010 ruling in Bilski v. Kappos that the “machine-or-transformation test” was not the only tool for determining whether a business process is patentable. A team of four attorneys at Durie Tangri, along with Delaware counsel Jack Blumenfeld of Morris, Nichols, Arsht & Tunnell, won summary judgment on May 31, 2011, effectively keeping Guidewire in business. Accenture, which settled related claims against Guidewire in other suits, has turned to the U.S. Court of Appeals for the Federal Circuit to reverse that ruling. Guidewire survived to become the first technology company to go public this year, on Jan. 25. “Accenture sued Guidewire pretty explicitly to put Guidewire out of business,” Durie said. The case was “exceedingly hard-fought” yet “incredibly gratifying.”
Some of the more novel cases Durie Tangri has handled haven’t ended as well. Last year, the firm, with New York’s Spears & Imes, represented the owner of a Spanish Web site whose domain names were seized as part of a U.S. Immigration and Customs Enforcement crackdown on piracy and counterfeiting. The Web site, Rojadirecta, hosts forums and live streams of sporting events. On June 13, 2011, the firm petitioned for return of the domain names. U.S. District Judge Paul Crotty in New York, citing alternative domain names under which Rojadirecta was then operating, rejected the petition on Aug. 4, 2011. That case is under appeal.
Durie Tangri’s most high-profile case has yet to be resolved. A class of authors sued Google Inc., Durie Tangri’s client, over potential copyright violations in its planned digital library. On March 22, 2011, U.S. District Judge Denny Chin in New York rejected a proposed settlement, concluding that the agreement would give Google “significant rights to exploit entire books” without copyright permission, rather than just “snippets” for online searching.
“It was incredibly contentious and it wound up being at the intersection of interesting copyright issues, and antitrust issues,” Durie said. “I don’t think of myself as a civil procedure geek, but those were incredibly interesting issues.”
Amanda Bronstad can be contacted at email@example.com.