Retiree health benefits, solar power and patent litigation might appear to have little to do with one another, but they’re all driving business growth at Farella Braun + Martel.
Long known for its specializations in renewable energy, bankruptcy and the wine industry, Farella Braun has continued to embrace fresh niche practices. The San Francisco firm, which just celebrated 50 years in business, saw revenues grow substantially in 2011 due to an increase in patent litigation. The firm also harnessed several solar power deals and developed an innovative trust fund to guarantee health benefits to retirees of bankrupt companies in the automotive and steel industries.
“Oddly enough, we’ve had our best year since the start of the recession,” said firm chairman Steve Lowenthal. “It’s quite a few different areas that have kept us busy.”
Farella Braun’s 130 lawyers work mostly in San Francisco, although the firm maintains a small office in St. Helena, Calif., the heart of Napa Valley. Lowenthal wouldn’t divulge specific numbers, but said that revenues had increased by single digits each year since the recession began. About 20 percent of the hours logged in recent years have been under alternative fee arrangements.
“We’ve always done a fair amount of alternative fee matters — typically, straight contingency arrangements — and that’s been true for most of the history of the firm. But there’s definitely been an uptick in alternative fee arrangements over the last few years,” he said.
Litigation, particularly in the patent arena, propelled much of the growth. Of the firm’s practice areas, two-thirds entail some type of litigation. “Each year, over the last few years, it’s really been a different group and different industry that have led the pack,” Lowenthal said. “Last year, we were very busy on the litigation side in particular.”
One of the biggest cases involved Volterra Semiconductor Corp., which sued competitor Infineon Technologies A.G. for infringement of patents involving flip-chip switching regulators used in electronics. “It was a very large case, hotly contested,” Lowenthal said.
On May 24, 2011, a federal jury upheld one of Volterra’s patents. Volterra, which previously won key rulings on claims involving another patent in the same case, intends to pursue damages this year.
The firm handled ongoing patent disputes for Dell Inc., Visa Inc. and Google Inc., and picked up a new client, Hotfile S.A., which is defending a copyright infringement suit brought last year by the Hollywood studios. In other areas, the firm is part of a team representing Toyota Motor Corp. in the multidistrict litigation case in Santa Ana, Calif., alleging damages caused by sudden acceleration.
Transactions and trusts
On the transactional end, Farella Braun specializes in real estate, family wealth and corporate deals. The firm has represented the The Doctors Co., which insures doctors, in several acquisitions, including last year’s $362 million purchase of FPIC Insurance Group Inc. Farella’s family-wealth practice benefited from a planned Jan. 1 change in federal law that could affect estate and gift taxes, Lowenthal said. The firm also served as real estate counsel to First Solar Inc. in two solar power projects in California.
Through its restructuring and insolvency practice, Farella Braun has been actively involved in creating trust funds that reimburse retirees for up to 72.5 percent of their health care premiums. The firm had first created these “voluntary employee benefit associations,” or VEBAs, for nonunion employees during the 2005 bankruptcy of Delta Air Lines.
“What this did was help to bridge those people that were between the ages of 55 and 65 who couldn’t get insurance anywhere,” said Cathy Cone, managing partner of Cone Insurance Group in Houston, who served as chairwoman of a committee representing 38,000 nonunion retirees in the Delta bankruptcy.
Farella Braun went on to establish VEBAs for retirees of Delphi Corp. and, last year, created the first industry funds for retirees of auto parts manufacturers and steel companies — by that time, the tax credits had been made easier to use and more generous under the American Recovery and Reinvestment Act of 2009.
Both plans roll out on July 1 (the steel VEBA is awaiting a bankruptcy judge’s OK). “We saw an opportunity to create a niche where we were the only firm doing this — and to do well by doing a lot of good,” said partner Dean Gloster, who has taken the lead in creating the funds.
Amanda Bronstad can be contacted at email@example.com.