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"Law Among Ruins" by Jeffrey Kosseff
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The Oregonian - August 24, 2001 |
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Article courtesy of OregonLive.com and The Oregonian |
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The burst tech-stock bubble may not rise again soon, but at least one new group of technology workers still is thriving. It's not the clean-room workers in bunny suits. And it sure isn't the public-relations reps. It's the group that everyone loves to hate and hates to pay: lawyers.
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In the late 1990s, law firms formed practices to cater specifically to technology clients, handling everything from venture capital deals to intellectual property rights. Although the firms no longer see eager dot-com executives lining up at their doors, they're still busy finding funding for existing clients and helping struggling ones merge or sell.
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Many areas of tech law, including financing deals, mergers and trademark disputes, also are handled by nontech practices. But law firms formed technology groups partly because, unlike older corporate clients, tech companies often rely more on intellectual property than on physical assets, creating a novel set of legal challenges. Their clients also sought help from lawyers conversant in their sometimes arcane business arenas.
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"Technology companies are not asset-rich with big buildings and molding presses and trucks," said Wallace Glausi, a partner in White & Lee, a Silicon Valley law firm that opened a Portland office last August. "What they have is intellectual assets. They have code. They have patents."
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The downturn hasn't hurt the firm, even though about 70 percent of its clients are in the tech sector. White & Lee has around 700 clients across its branches, about 20 percent higher than a year ago.
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Demand for technology law has maintained the upward swing of the last five years, said Anne Glazer, partner in the intellectual-property and Internet group of Lane Powell Spears Lubersky in Portland. But she said the growth no longer is rapid and hectic. "We were all running so fast for the last two years that it was a case of demand outstripping supply, and now we're back to more normal business, rather than seeing our business dry up," Glazer said.
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Lawyers said while fewer small companies are sealing funding deals, law firms are dealing with more time-consuming -- and lucrative -- tasks such as merging companies.
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"Right now, we're doing as much technology volume as we were during the stronger markets," said Roy Tucker, managing partner at the Portland office of Perkins Coie. His practice areas include electronic commerce and Internet law, along with more traditional segments, such as government contracts. "While there're fewer transactions, they tend to be more complex, like a company having trouble getting financing and is looking for a buyer."
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Money still out there
"Funding is still available for 'hard-core' tech companies, and lawyers still must help seal the deals," White & Lee's Glausi said.
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"Two guys and a PowerPoint presentation were getting funding a year ago," Glausi said. "But it's not any harder to fund good technology. It's just taking longer."
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At this year's pace so far, private financings in Oregon and Southwest Washington are on track to exceed 70 percent of last year's tally -- the highest on record, according to The Oregonian's Silicon Forest Private Investment Database. Equity investments in the first two-thirds of this year have totaled about $380 million, compared with $787.16 million last year. Most of the money both years has been for technology-related companies.
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One of White & Lee's clients, Picojet, is using the firm to help find a second round of financing. The Hillsboro-based supplier of industrial printer equipment received $1.5 million last year and is searching for $3 million more now.
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"It's definitely a lot more dry, but we're still looking," said Ray Veillet, Picojet's vice president of business development.
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The big firms aren't the only ones remaining buoyant amid sinking tech-industry economics. |
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Patent law still hot
Timothy Siegel, whose West Linn private practice handles mostly patent law, said companies still are protecting their intellectual property. Indeed, changes in federal court precedents in the last few years have enabled companies to patent their business methods, creating even more demand for his services, he said. "Patents are popular and just seem to be becoming more popular," Siegel said. Siegel mostly serves medical device clients, he said, although last year he also saw a spate of Internet start-up clients.
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Technology lawyers also see prospects for future demand for their services in technology-related laws that Congress and state legislatures are considering adopting. Among them are laws governing privacy, software licensing and intellectual property.
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Ironically, Lane Powell's Glazer said, technology companies aren't flooding firms with demands for advice on bankruptcy law, even as Internet start-ups go out of business.
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"There are some bankruptcies, but the activity has been less than people might think, just because a number of the dot-coms didn't have a lot of assets to protect in bankruptcy," Glazer said.
You can reach Jeffrey Kosseff at 503-294-7605 or by e-mail at jeffkosseff@news.oregonian.com.
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