If They Can Make It Here ...

Mar 12 2001

NEW YORK - Is it optimism, wisdom or lunacy? California's premier technology law firm is opening up shop in New York. The move is somewhat surprising: The rest of Silicon Valley is curbing spending and expansionist impulses, and Silicon Alley is doing neither, because it barely has a pulse. But Wilson Sonsini Goodrich & Rosati has chosen this moment to open an office in Manhattan, stealing two partners from a rival in a raiding ritual that calls to mind the go-go '80s.

Wilson Sonsini's timing is "not obvious," as one competitor politely puts it. But Larry Sonsini, his tone patrician, is unruffled. "I've been through these slowdowns before," he says. "I think the technology industry will always be a growth industry. You've got to look long-term. You've got to look five years out."

Reassuring words, coming on the heels of so much bad news in the tech sector. But Sonsini voiced concern during the peak of the boom about getting too carried away chasing dot-coms. Indeed, with consumer confidence alarmingly low, Sonsini is something of a happy consumer. He's buying New York, and he's buying the Internet. And not everyone thinks he's crazy.

There's no denying that business for technology lawyers, just like for everyone else, has dipped dramatically. On the other hand, while the public markets are in a deep sleep and venture capitalists are still tight-fisted, lawyers aren't necessarily doodling on their yellow pads. The dot-com bust is ushering in a period of mergers and acquisitions, as well as the activity that comes when a company goes out of business, including potential legal troubles over shareholder suits or regulatory issues. And even shrinking companies need legal advice.

"Any technology play that helps people cut costs is especially attractive in a market like this," says John Kennedy, co-chairman of the new-media practice in the New York office of San Francisco's Morrison & Foerster . Kennedy says his firm is still "bullish" on business in the Big Apple, particularly in the areas of infrastructure, software and networking. "Has the technology market for law in New York fallen over in a dead faint? The answer is not at all."

Nonetheless, Wilson Sonsini's hopes obviously lie in positioning itself for more robust times. The firm plans to expand into Europe; being in New York seems a logical precursor. The firm already counts more than 100 clients in Connecticut, New Jersey and New York. Moreover, it wants to be closer to the capital markets. "To be a global player, you probably can't do that from Palo Alto," notes Wilson partner Mario Rosati. "We don't look at things month-to-month or quarter-to-quarter or year-to-year."

Still, the firm is starting small. Several of its California rivals have been here for years; Morrison & Foerster, for instance, has more than 150 lawyers in New York. Wilson Sonsini's new office will have two partners, Alex Lynch and Bo Yaghmaie, who left the Valley's Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, and eight other lawyers.

It may be a good idea to not staff up too quickly. "There's not enough work for anybody right now in New York, not in Silicon Alley or emerging technology," notes Bobbie McMorrow, who does strategic planning for law firms. "This is probably a move that Wilson Sonsini had to do to keep extending its brand. Is the work there? I think that's questionable."

Hey, at least they'll be able to get a decent pastrami sandwich.