West Coast technology buyouts look poised to boom. And the law firm Goodwin Procter wants to be on the ground to advise the biggest players.
Already well-represented in Boston, New York and Washington, D.C., Goodwin Procter is expected over the next several months to begin hiring attorneys on the West Coast with expertise in buyout and venture capital deals. The firm may also add attorneys with fund formation expertise.
Most of the new attorneys would work out of a San Francisco office opened this spring, and a Palo Alto, Calif., office that the firm plans to open within the next 18 months. Some may work out of a Los Angeles office that also opened in the spring.
“We intend to be there in a very significant way, befitting one of the top buyout and venture capital practices in the country,” says John LeClaire, partner and chair of the firm’s Private Equity Group. Ultimately, the firm plans to have a diversified practice based on the West Coast, starting early this year with real estate capital markets, expanding to private equity, and ultimately embracing intellectual property and litigation.
LeClaire wouldn’t say whether the would try to hire attorneys one at a time or to acquire a full practice in an acquisition or a mass hiring. The latter was its approach in June when it hired three buyout-focused partners and five associates from the Washington, D.C., office of Hogan & Hartson. That followed its early 2005 absorption of a far larger venture capital and technology practice from Boston-based Testa Hurwitz & Thibeault following that organization’s flameout.
West Coast candidates will be pitched the chance to work in a democratic atmosphere—one devoid of “big outsized personalities,” says LeClaire. Those concerned with the boom-and-bust nature of private equity will be told of a diversified, 700-attorney firm where venture capital, tech company and buyout clients accounted for less than half of the revenue the firm produced in the fiscal year ending Sept. 30.
“We’re going to go out in the market and see if the proposition appeals to some really good-character, collaborative kind of people who have significant practices,” says LeClaire.
Presently, the firm fields a team of about 30 partners and 30 associates dedicated to buyout deals in its Private Equity Group (with many other attorneys contributing time); 20 partners and 30 associates in the Technology Companies Group dedicated to venture deals and tech company work; and eight partners and eight associates dedicated to fund formation work across private equity and other alternative asset classes. Goodwin Procter’s buyout, venture capital and technology practice revenue grew about 50% in its latest fiscal year, compared with about 22% for the firm as a whole, LeClaire says.
Partly behind Goodwin Procter’s move west is a desire to keep up with clients that have offices on both coasts, including Behrman Capital, Highland Capital Partners, Spectrum Equity Investors and TA Associates. Goodwin Procter also is motivated by what looks like a coming deluge of tech buyouts.
Silver Lake Partners, of Menlo Park, Calif., is expected to lead a procession of technology specialists back to market to raise at least $15 billion for fresh deals next year. That’s on top of billions already raised. Several West Coast law firms are well-schooled in venture capital and technology deals. But, LeClaire says, on the later-stage, more complex transactions, “California doesn’t have a surplus of lawyers who are great at it, and our clients have told us that.”
Beyond those reasons, Goodwin Procter has a lot of momentum that makes the timing right, according to LeClaire. Along with recent additions from Hogan & Hartson and Testa Hurwitz, the firm in early 2005 saw the return of John J. Egan III, a partner in the private equity and technology companies group. It was Egan and LeClaire who drew up the plan for Goodwin Procter’s buyout and venture capital practice in 1990 and nurtured it together until Egan left the firm in 1999.
“It was a complete harmonic convergence,” says LeClaire of the confluence of hiring. “The basic character of this place hasn’t changed at all. But our national profile has been elevated, and our pace of growth has accelerated pretty substantially.”