Sweeping changes are in store for the law community in San Diego this year, starting with patent reforms approved by the U.S. House of Representatives and under consideration by the Senate.
The patent community anticipates that San Diego will be selected as a pilot district for the proposed program approved by the House in September.
The bill introduced by Rep. Darrell Issa, R-Vista, and Rep. Adam Schiff, D-Pasadena, establishes a 10-year program in several U.S. district courts to develop expertise in patent cases. It would provide further training and additional patent prosecution and patent litigation-savvy law clerk staffing for judges who have the desire and aptitude to hear more patent cases, while preserving the principle of random judge assignment to help avoid forum shopping.
With San Diego identified as a pilot participant, the approval of the patent bill would ultimately increase the number of intellectual property cases in the county and possibly increase the number of practicing IP attorneys in San Diego.
The Senate has introduced a companion bill to be voted on this year.
Issa said the legislation will raise the level of expertise in patent litigation, improve reliability of patents and allow businesses to spend more time inventing and less time litigating.
Veteran intellectual property attorney John M. Benassi with the San Diego office of Heller Ehrman LLP said if this bill passes, there is a good possibility that San Diego will become an even more desirable forum for filing patent lawsuits.
“We have some very good judges here in San Diego already that have an excellent reputation of handling patent cases,” said Benassi. “That, coupled with the anticipated passage of the Issa bill, I think will cause the San Diego IP market to flourish.”
But is it enough? Benassi continued to say that firms are already competing for patent litigation and patent prosecution work. The passage of the Issa bill would create even more competition and ultimately repercussions for an overcrowded IP market, according to Benassi.
“I think there is going to be a fallout of companies in San Diego,” said Benassi. “Where a number of them are going to end up either closing or discontinuing their IP practice because there is quite a lot of competition in San Diego and there is talk of three or four more firms wanting to open up offices.”
Benassi quoted growth in the IP sector has risen during the past 20 years from just five to 10 attorneys in the San Diego Patent Law Association to more than 475 registered members.
Another practice area expected to see upheaval in San Diego this year is in bankruptcy. Attorney Margaret M. Mann, Heller Ehrman’s San Diego office chairwoman of restructuring and insolvency practice, said with the anticipated burst in the real estate market comes a burst in personal, and possibly business, finances.
“You can’t avoid the impact of intense economic change,” said Mann. “People have to do something and I do expect an increase in the number of bankruptcy cases, as do many other authoritative sources.”
An increase in number of clients correlates with an increase in number of attorneys needed to represent clients. The nation’s largest 250 law firms grew by 4 percent in 2006, according to the National Law Journal’s 29th annual survey ranking firms on the number of attorneys employed. This figure is just shy of last year’s gains of 4.4 percent growth.
The State Bar of California welcomed 4,475 new active attorneys from Dec. 1, 2005, to Dec. 1, 2006. In San Diego, bar membership grew by 372 to 13,135 active attorneys during the same time period. These figures represent a 2.91 percent growth in active attorneys in the county.
Voluntary membership grew from 8,229 in December 2005 to 11,000 in December 2006 at the San Diego County Bar Association. The San Diego bar is the second largest bar association in the state, behind only the Los Angeles County Bar Association.
Megan Rudebeck, communications assistant with the San Diego bar, said approximately 2,700 of the new members are students from California Western, Thomas Jefferson and University of San Diego schools of law participating in a new program introduced in the fall.
Eight of the top 25 largest U.S. law firms have offices in San Diego, according to the National Law Journal’s top 250 list published in November. National and San Diego-based law firms continue to rise in the ranks year over year. Not surprisingly, all eight have offices in the Del Mar Heights or University Towne Center area.
Michael Nalu, an attorney with Little Italy-based law firm Gordon & Holmes, said it makes sense for law firms with significant patent practices to want to be close to biotech, pharmaceutical and technology companies. Many of these companies have offices and headquarters in Carmel Valley, Del Mar Heights, La Jolla and the UTC area.
“There has been a synergy there and now a lot of firms are following suit,” said Nalu.
North County has welcomed many new law firms setting up shop in Southern California, including Birch, Stewart, Kolasch & Birch LLP in November, and seen significant growth from existing firms.
The Del Mar Heights office of Sheppard Mullin Richter & Hampton LLP added four patent attorneys and one corporate practice attorney in 2006 and moved into a larger office to accommodate current and anticipated growth.
Dick Kintz, managing partner of the Del Mar Heights office, said the addition of the legal team and the bigger office demonstrate the firm’s long-term commitment to North County, which is directly related to the region’s strength as Southern California’s premier technology corridor.
Diversity Among Us
The UTC office of Mintz Levin Cohn Ferris Glovsky and Popeo PC saw significant growth in 2006, welcoming a half-dozen attorneys to its staff, and has a strong commitment to diversity.
Cherie R. Kiser, an attorney with Mintz Levin’s Washington, D.C., office and firm chair of the diversity committee, said Mintz Levin was formed in 1933 as a result of discriminatory action and has had a strong record of hiring females and minorities since it opened.
Kiser said offering flexible work arrangements, outreach and internal mentoring are being used to assure attorney retention and growth.
“All of these definitely enhance our profile externally but it really enhances how people feel about the firm internally,” said Kiser.
Vickie Turner, partner with San Diego-based Wilson Petty Kosmo & Turner LLP, said having diversity within a law office is essential with clients, during trial presentation to juries and in-house among fellow employees.
“We strongly believe that diversity can have a better work product, more creativity and different perspectives,” said Turner.
Wilson Petty’s downtown office is home to 19 attorneys, 11 of whom are females and seven minorities.
Turner also added that diversity is important in trial presentations as juries are becoming more and more diverse themselves.
Balancing demands at work and responsibilities at home can be difficult for any working professional, and according to the Lawyers Club of San Diego, 29 percent of the nation’s lawyers are females, 17 percent of the nation’s firm partners are females and a quarter of the nation’s tenured law school faculty are women.
The Association for Legal Career Professionals released a recent study that found women account for 45.51 percent of associates, 15.94 percent were minorities, and 9.29 percent were female minorities in San Diego. In addition, 18.52 percent of partners were female, 6.48 percent were minorities and 1.3 percent were female minorities in San Diego. The association surveyed 22 law offices in San Diego.
Area law schools are educating a more diverse base of students. California Western, Thomas Jefferson and the University of San Diego schools of law are seeing closer male-to-female ratios in the classrooms.
Cal Western has 50.3 percent males and 49.7 percent females. In addition, 58.7 percent of the student body is classified as white. USD consists of 54.5 percent males. In addition, 72 percent of the student body is classified as white. Thomas Jefferson has 56 percent males. In addition, 82 percent of the student body is classified as white.
Big In ’07
Attorney C.J. Martin with the San Diego office of Pillsbury Winthrop Shaw Pittman LLP said several national laws will affect business in San Diego this year. Martin, a litigation associate whose practice focuses primarily on securities and complex commercial litigation, said besides increases to minimum wage, there are very few new state laws affecting San Diego.
Martin said several national laws and rules that will change public company business include increasing transparency in executive compensation, “best price” rules concerning tender offers in mergers and acquisitions, and the announcement of NASD , formerly the National Association of Securities Dealers , and the New York Stock Exchange to merge into one self-regulatory organization, or SRO.
The U.S. Securities and Exchange Commission approved several rules aimed at increasing transparency in executive compensation. These rules went into effect Dec. 15. The SEC now requires companies to disclose and specifically explain executive compensation, including salary, bonuses, options and other financial incentives.
The SEC also made changes to its best price rules in October concerning tender offers. The rules require that all shareholders be paid the same price in a tender offer.
The NYSE and NASD announced they are close to a merger of the two regulators into one SRO. Many have complained that the two entities were repetitive in investigations and conflicting in rule making, according to Martin.