Commercial litigation, IP hot topics on legal horizon

BOULDER ? Area attorneys are looking to 2003 as another strong year but continue to be deliberate about where to focus their efforts.

While business is stable, uncertainty in the market has lead to caution as well. Faced with last year’s economic downturn, corporate scandals and renewed vigor in corporate reporting legislation, firms are trying to determine how clients will react.

?I think that the issue that is the least predictable for legal services professionals is how clients will react over time to the experience of the last year where everybody has just been hit hard and everyone is on edge,? said attorney Cam Kuelthau, who manages the Boulder office of Holland & Hart.

?We don’t know what the effect will be in the long run as to how they purchase legal services, how they price legal services and how loyal they are to their legal services provider,? Kuelthau said. ?It’s going to be up to the legal services community in general to address the clients’ concerns. They are all faced with very real budget cuts and very real issues that they have to deal with within their own world.?

Despite those uncertainties, intellectual property, commercial litigation and real estate continue to be hot topics on the legal horizon. In particular, many firms are continuing to see a steady stream of clients who are pursuing the development of small but vital ideas and are willing to pay to protect them.

Brendan Chatham, the managing partner of Hutchinson, Black & Cook in Boulder, said he’s seeing some significant growth in the area of entrepreneurial business development.

?My experience in the second half of 2002 — and I think it’s just going to continue into next year — is seeing people who have their own financing arranged, either from savings or through friends and family.

?It’s going to be a situation where they’re going to start out in much more of a niche market with a couple of primary clients or customers and seek to grow by developing a cash source and revenue flow rather than through equity funding,? Chatham said. The legal work typically begins with the formation of a corporate entity.

?It’s typically S-corporation or limited liability companies,? Chatham explained. ?The limited liability company is very attractive these days. I think it has kind of a sexy connotation to it. It’s below the radar.?

Intellectual property and business development also make a nice market for attorneys because there are a number of other related issues beyond the initial organization.

?There’s a very strong IP (intellectual property) presence in Boulder, both patent and non-patent,? Kuelthau said. ?If you take that as maybe a core, there are a number of other services that surround these companies that would look for them. I’m thinking of labor and employment, estate planning and other kinds of litigation, and general business and real estate.?

Real estate often comes into play with entrepreneurial clients as well and is one specialty valued by both large and small firms.

?Given Boulder County’s regulatory environment, being agile in dealing with the regulatory authorities in real estate deals is important,? Chatham said. ?The real estate attorneys around here are far more sophisticated then they are in other parts of the state because they have to be more creative in how they represent their clients as developers. You have to know the players and not just the law.?

The other legal demand from both startups and more established companies involves the continuing presence of lawsuits.

?You’re seeing more short fuses in dispute resolution, so I think there is some growth in all facets of commercial litigation,? Chatham said. ?A lot of that has to do with people being more concerned about the credit worthiness of their counterparts on the other side of a transaction. They want to make sure that they don’t become a creditor in a bankruptcy situation.

?Not that these situations lead necessarily to litigation, but I think you’re seeing a lot more posturing at the beginning of a situation that would otherwise lead to litigation. I’m doing a lot more dispute resolution situations than I had experienced in the past.?

Bill Roberts, an attorney at Hogan & Hartson in Boulder, also believes there will be an increase in strategic partnerships this year.

?I would expect to see some increased acquisitions & mergers activity in 2003,? said Roberts. ?At some point, we are going to see an increase in A & M activity either because more companies are desperate to find a way of going out of business other than bankruptcy or because things are looking up and people are now able to have a meeting of the minds between a willing buyer and a willing seller.?

Attorneys in Boulder, as well as their counterparts across the county, also are dealing with the fallout from last year’s corporate scandals, primarily from issues related to the Sarbanes-Oxley Act.

?We have some interest in what we generally call corporate governance,? Roberts said. ?For the public companies, it’s a lot of increased advice about audit committee responsibilities and the certifications they have to make on their filed documents.?

Government regulations also can lead into other areas as well, according to Sharon Caulfield at Caplan & Earnest, which deals with a number of Boulder County’s nonprofit organizations.

?This is a time when there is a heightened concern about regulation,? said Caulfield. ?In the health-care arena during the past several years, there has been a lot of regulation concerning privacy, and we’re dealing with that for our health-care clients right now as well as for businesses that have to comply with new privacy regulations.?

The one area where firms are seeing less business from is high technology. Where the industry has been an area of high interest in previous years, most of the larger firms are continuing to build a more fixed base of clients.

?I think that the one big trend that all the law firms would like to have — and we’re talking here about the bigger local and the national law firms — is a more broad-based practice that includes a mix of both public and private companies with substantial revenues as well as your venture-backed companies,? Roberts said. ?I think what we’ve seen in the last few years is that we didn’t want to miss the boom times by not having the private equity technology practice, but it turned out to be a little too risky. Basically, diversity is good.?

Kuelthau said that his firm is approaching the new year with a back-to-basics approach that makes it easier to approach trends in the industry.

?I think the best thing that we try to do is be proactive about it,? Kuelthau said. ?We try to partner with the client and work with them to understand what their needs are and what the pressures are that are being brought to bear on them. Then, whatever those circumstances are, we can craft a solution within the legal relationship to address those pressures. It’s such a case-by-case thing that it’s not like there’s one thing you can do that always works. You have to be so attuned as to what the demands are on your client and then bring to the relationship aspects or skills that meet the demand.?

on Facebook on LinkedIn