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Oppenheimer Lawyers May Be Going to Dechert

Alexei Oreskovic
The Recorder
05-22-2003


A significant group of Oppenheimer Wolff & Donnelly's Silicon Valley partners may be jumping ship to 700-lawyer Dechert, according to two sources with knowledge of the situation.

The move puts in question the future of Oppenheimer's Silicon Valley office, and leaves the Minneapolis-based firm with a massive, and potentially crippling, lease.

The departing attorneys are primarily intellectual property litigators, which make up the majority of Oppenheimer's 40-attorney Silicon Valley office. The group is expected to launch a new Silicon Valley office for Dechert, which established a three-attorney San Francisco outpost in January.

A spokesperson for Dechert said the firm does not comment on rumors.

Chris Graham, managing partner of Oppenheimer's Silicon Valley office, did not return a call for comment, and an Oppenheimer spokesperson declined to comment.

But one source familiar with the deal confirmed that Dechert had sent offer letters to a number of Oppenheimer attorneys.

According to another source inside Oppenheimer, 10 to 12 Silicon Valley attorneys, primarily corporate lawyers, had not received offers from Dechert. The fate of these attorneys, including whether Oppenheimer would retain them, is unclear.

An all-hands meeting was scheduled for late Wednesday afternoon at the Silicon Valley office, according to the source.

In February, Oppenheimer announced plans to spin off its Silicon Valley office, citing differences in the Minnesota and California technology markets. "The firm and our office concluded that it would be easier for the attorneys in our office to grow our business if we were on a different platform than Oppenheimer provides," Silicon Valley partner Michael Kalkstein said at the time.

Initially, the plan called for the unusual step of selling the entire office, including the lease and accounts receivables, to a firm looking for a one-stop California presence.

The reports of Dechert hiring Oppenheimer attorneys suggested that the office had not found a buyer.

Most significant for Oppenheimer is the Palo Alto lease. According to former Oppenheimer partners, the firm's Silicon Valley lease still has 10 years left on it. And the lease, for two separate buildings comprising 55,000 square feet, was signed in 1999 when corporate real estate prices were much higher than at present.

"They've got very substantial lease obligations," said one former Oppenheimer partner. "My guess is that unless they can somehow void them or find somebody to take the leases off their hands, I think they've got a problem."

The firm's earlier decision to spin off its Silicon Valley office is the latest indication that Oppenheimer is falling back to its Midwestern roots after a decade of aggressive expansion. In February, the firm announced it was shutting down its Los Angeles office. The firm's Orange County office headcount has been cut almost in half over the past two years, while its New York office has withered to three attorneys.