June 16, 2011

THE DAILY JOURNAL

By Chris Stein

PALO ALTO – July 2008 was an awkward time for Lowenstein Sandler PC to open a new office in Palo Alto, far from its New York City roots. The financial crisis was looming, and soon many law firms would be scaling back instead of expanding. With a small startup team, the office bided its time for two years, waiting out the recession. Now the outpost is entering a season of growth. In the past 11 months, it has added 12 intellectual property, patent and corporate transactional lawyers, bringing the office’s lawyer count to 14.

‘We were essentially holding back in 2008 and 2009. By 2010, we started getting more bullish.’ – Gary M. Wingens

Managing partner Kathi A. Rawnsley said the expansion happened at an opportune time for the firm and exemplifies its corporate philosophy.

“Growth makes sense,” said Rawnsley, who was acting general counsel for Intel Capital before opening the office. “I’m very optimistic about the growth of this office.” In the beginning, “office” was a strong word for Lowenstein’s Silicon Valley presence. Firm chairman and CEO Gary M. Wingens said its first home was Rawnsley’s dining room table.

Until last summer, Rawnsley and one other attorney were its only lawyers. When the economy started to improve, the 270-lawyer firm began ramping up its numbers in Palo Alto.

“We were essentially holding back in 2008 and 2009,” Wingens said. “By 2010, we started getting more bullish.”

It became clear it was time to hire last year, Wingens said, because West Coast clients were demanding more of Lowenstein’s services. Its other two offices are located in New York and New Jersey. Rawnsley said many technology companies prefer to meet their counsel in person, a benefit Lowenstein can now offer.

The influx of lawyers started last July when the office hired an associate and transferred a senior counsel from New York. An additional three lawyers joined by early this year. Rawnsley said the most dramatic change came in April when seven patent lawyers left IP boutique Blakely Sokoloff Taylor & Zafman LLP to join her team.

Edward M. Zimmerman, chairman of Lowenstein’s emerging companies-focused Tech Group, said the two Blakely Sokoloff partners – Daniel E. Ovanezian and Marina Portnova – and five associates brought over clients such as open-source software company Red Hat Inc., Internet security software maker Symantec Corp. and other “really iconic” firms. They also contributed much-needed corporate transactional expertise.

“This group was a particular success for us,” Zimmerman said.

Business has kept pace with the speed of hiring. In 2010, Wingens said, the tech group was involved in 150 venture capital financing transactions, many of which took place in Bookmark Reprints

California and were handled by the firm’s Palo Alto lawyers. The firm represents angel investors, venture capitalists and funds and startups in connection with those investments.

However, the office’s continued growth – a specific goal of Lowenstein’s – will not be easy because of stiff competition in the Silicon Valley legal market, said legal recruiter Larry Watanabe, who helped bring the Blakely Sokoloff attorneys to Lowenstein. Yet Watanabe said he remains optimistic the firm will make progress in the region. “I would not have invested time had I not believed they would be successful,” he said.

Rawnsley said the next step is to acquire larger office space, which the firm hopes to pin down in the next several months. Meanwhile, recruiting efforts are ongoing for laterals in complementary practice areas, such as fund formation, employment, technology transactions and litigation.

Wingens emphasized any future growth would be in line with demand for the firm’s services.

“Our plans are to grow with our client demand in Silicon Valley,” he said. “We’re not just growing for the sake of growing.”

*Staff writer Jill Redhage contributed to this report