The discussion from the meeting room next door is getting a little heated, and Tom Kellerman is a softly spoken man. It is difficult to concentrate on joint venture structures at the best of times, but it is even harder when you are also eavesdropping on two lawyers bellowing into a speakerphone. The Brobeck Hale and Dorr (BHD) managing partner raises his eyes to the heavens, sweeps up my glass of water and, with perfect Californian grace, escorts me out.
Chicago-born and West Coast-bred, Kellerman – who despite the picture is still doggedly sticking to dressdown (oh, very 1999) – is a San Francisco lawyer straight from central casting: a fluent, soothing, no-caffeine kind of guy.
More importantly, he is the Brobeck partner that got away. Although managing partner at Brobeck’s European venture BHD since April 1999, he left the parent firm’s partnership when he arrived in London that year. So he won’t be on the hook for any potential liabilities incurred by Brobeck’s collapse, which might explain why he is so laid-back today.
But then, you can’t quite imagine anything ruffling Kellerman’s feathers – not even the spectacular fall of one of his joint venture parent firms. Just as Brobeck was disintegrating the previous week, BHD – its semi-detached European joint venture – smartly rushed out a press release saying that it would be taken under the wing of its other parent, Boston-based Hale and Dorr.
Kellerman plainly had to act fast before speculation about BHD’s future became damaging. Originally set up by the two US firms back in 1990 as a separate multinational partnership, BHD will now become integrated into Hale and Dorr’s US operation.
In any case, Kellerman could see the way things were heading well before the vote for dissolution; BHD had already started to distance itself from Brobeck by the time of the collapse. The impetus was the West Coast firm’s talks with Morgan Lewis & Bockius.
“The nature of the joint venture [between Brobeck and Hale and Dorr] has always been exclusivity in Europe,” Kellerman says. “If Morgan Lewis had done the merger, the joint venture would have to go away because Morgan Lewis had European offices. Till Thursday [30 January] that had seemed the most likely result.”
Kellerman spends a few minutes softly disclaiming all knowledge of the dying days of Brobeck. Technically, he stopped being a Brobeck partner four years ago, but given that he spent 19 years at the firm and since 1999 has run the joint venture operation, this does not quite ring true. Rather, I get the strong impression that he simply does not enjoy confrontation. If anything, he seems almost bemused by the Brobeck soap opera.
In fact, for a man whose business has been built on advising thrusting young start-ups, Kellerman prizes stability (he rather likes the statistic that Hale and Dorr has had only two partners leave in the last 10 years).
“I have a sense that [the collapse happened because] a significant number of partners started to make sure they had a back-up place to go, and that feeds on itself,” he confides.
And Tower Snow? “Well, there’s a lot of blame to be shared,” Kellerman says without hesitation. “I certainly don’t think that the group going to Clifford Chance was what brought the firm down. Everything was a contributing factor. But it’s hard to envision the mindset in the late ’90s and 2000 in Silicon Valley. Everybody was foolish – not just lawyers. Tower doesn’t do anything halfway – he does things all the way, and he did them in good faith.
“Brobeck is a very transparent place,” he continues, just getting into his stride. “Every month partners got every piece of financial information. Everyone knew the debt they had and how much real estate they were taking on.”
There is a pause, and he looks away. Both of us are a bit bored of Brobeck conspiracy theories by now. But Kellerman, despite having escaped from the Brobeck meltdown, will still have to cope with the aftermath – and particularly the effect on BHD’s brand.
So right now he’s concentrating on getting the message across. And he plays it convincingly too, helped by a sweetly languid delivery which seems to indicate a man entirely confident of his firm’s future.
As a separate partnership, BHD was turning over an estimated £12m a year (although the firm does not disclose figures) and many of its clients were independent of the US parent practices.
Kellerman’s team has worked hard on developing a mixed domestic client base of companies and intermediaries, including Parthus Technologies, British Biotech and Doughty Hanson Technology Ventures. The handful of Brobeck clients which used BHD seem happy to carry on doing so; as we report this week on page five, Cisco general counsel Mark Chandler has confirmed that BHD is still the company’s preferred outside counsel in Europe.
But the name Brobeck, with that whiff of hubris, presents separate problems, and Kellerman argues that rebranding the firm will be tricky. “It’s unlikely that we’ll long term keep the Brobeck name – it’s not decided yet,” he says. “It may be that we’ll take the Hale and Dorr name. But we’ll have to make sure we do it in a way that we transfer the value to whatever the [new] name is.”
Contrary to perception, BHD never had much of a dotcom client base, but was far stronger in the general high-tech and life sciences sectors. It pitched and got the Bookham Technology float back in 1999 despite BHD’s size, which was a perfect showcase for the mix of tech and corporate finance lawyering that was the firm’s calling card.
Bookham is still a trophy client, by the way; general counsel Philip Davis turned to BHD partner Richard Eaton for its major deals last year – the £19.7m acquisition of the optical components divisions of Marconi and the $111.6m (£68m) acquisition of Nortel Networks.
So far, BHD has managed its growth pretty well. From five partners in 1999, BHD now numbers 19 partners and 45 lawyers in Europe; it pinched a Morgan Cole team led by Joe Pillman in July 2000 to cover the Oxford-Reading axis, and opened a venture capital and intellectual property (IP) practice in Munich in January 2001.
Kellerman is open about the firm’s strategy this year: keep to its corporate-tech specialisms. Its top priority, though, is to build up its technology transfer practice, targeting those businesses emerging from an academic environment which have little more than patent applications to their name.
“We’ve found ourselves very involved in commercialisation of the universities, representing companies spun off from the universities,” he says. BHD partners Kate Eavis and Mark Haftke (late of KLegal) have been targeting institutions such as Warwick, Bristol, Glasgow, Imperial College and, of course, Oxford. It is not an area that has been well colonised by law firms, and certainly not by any with a US capability in finance-raising.
The model is obvious: both Brobeck and Hale and Dorr have had years of experience of bringing companies to market, particularly given the two firms’ proximity to academic powerhouses Stanford University and MIT respectively. Hale and Dorr advised on no fewer than nine public offerings in the life sciences sector in 2001, along with a whole slew of second and third-round financings.
What BHD lacks, though, is a serious IP litigation or regulatory capability, where the likes of Bristows will continue to win out. Kellerman admits that building an all-round commercial practice to support the firm’s ambition will take some time.
“You’ve got to have a long-term vision,” he says, in the tone of a man who has seen enough hype to last a lifetime.
“It’s going to take 10 years. It can’t happen overnight.” he says. And with that, the Brobeck survivor pads away down the corridor.