Among the signs that Silicon Valley has its money-making mojo back are, quite literally, the signs. Out-of-town law firms are again hanging their shingles in Palo Alto and Menlo Park. Nixon Peabody, a venerable East Coast firm with roots in Boston and Rochester, N.Y., is the latest arrival.
“Everybody wants to be where the action is,” said an attorney at Sonnenschein Nath & Rosenthal, another valley newcomer.
Four years after the dot-com crash led to the implosion of the once-formidable Brobeck Phleger and forced drastic layoffs at other firms, the valley’s legal trade is booming again.
Established local powers like Wilson Sonsini Goodrich & Rosati, Cooley Godward Kronish and Fenwick & West are expanding. The American Lawyer magazine calculated that all three firms earned more than $900,000 per partner in 2005, surpassing the 2000 boom year. International firms have opened valley outposts, and smaller local firms are growing as well. Headhunters are on the prowl, poaching talent.
Firms are getting wooed about merger possibilities. Legal business consultant Peter Zeughauser brokered a 2005 deal that gave London-based DLA Piper, a global giant with more than 3,000 lawyers, a Silicon Valley branch through a merger with Gray Cary Ware & Freidenreich. He’s working on others. “If I had a merger partner for everyone who asked me to help them get into Silicon Valley,” he said, “I’d be buying Larry Ellison’s house.”
The valley’s robust business and the bad news of the stock options scandal are all good for the legal profession. While partners are working out details in mergers and acquisitions (M&A) and nurturing start-ups, young associates down the hall are piling up the billable hours to justify a first-year salary that, at some firms, has soared to $160,000 a year.