Making Connections, Managing Risk in Startup Deals: A Visit to Boston Law Firm Mintz Levin

8/25/09Follow @wroush

If you’ve seen from the inside how technology startups get created and funded, you know that law firms are involved at every step in the process. But to outside observers, it might be surprising just how central a role the attorneys can play—not just by helping entrepreneurs with incorporation papers and the other legal rigmarole of starting a business, but by connecting them with the right venture capital firms and making sure investments are structured fairly for both the founders and the venture funds. And while nobody likes to pay legal fees, a good outside attorney can literally save a company when things start to go south: an experienced firm can help straighten out founder-investor conflicts or line up emergency financing, for example.

Given that Boston was the birthplace of venture financing, it’s probably not surprising that it’s also home to a large group of law firms specializing in company creation and financing. Indeed, you can’t go far in the startup world without bumping into names like Cooley Godward Kronish, Edwards Angels Palmer & Dodge, Foley Hoag, Foley and Lardner, Goodwin Procter, Mintz Levin, Proskauer Rose, Ropes & Gray, Nutter, and Wilmer Hale (see tables on this page and page 4). Several of these firms are home to former partners from Testa Hurwitz, the Boston firm that more or less invented the modern corporate technology practice; Testa launched and represented scores of Boston-area startups, venture capital funds, and technology giants between its founding in 1973 and its dissolution in 2005.

Selected Boston-Area Law Firms
Serving Technology Startups
Bingham McCutchen
Bowditch and Dewey
Brown Rudnick
Burns & Levinson
Choate Hall & Stewart
Cooley Godward Kronish
DLA Piper
Edwards Angell Palmer & Dodge
Finnegan
Fish and Richardson
Foley Hoag
Foley and Lardner
Gesmer Updegrove
Goodwin Procter
Goulston & Storrs
Greenberg Traurig
Hamilton, Brook, Smith & Reynolds
K&L Gates
McCarter & English
Mintz Levin
Nixon Peabody
Nutter
Proskauer Rose
Ropes & Gray
Wilmer Hale
Wolf Greenfield

Last week I sat down with Tom Burton and Lewis Geffen, two attorneys from the corporate practice at Mintz Levin‘s Boston office, to hear more about how law firms fit into the local innovation ecosystem. Founded here in 1933 by Herman Mintz, Benjamin Levin, and Haskell Cohn—three Harvard Law School graduates turned away by Boston’s white-shoe firms because they were Jewish—Mintz Levin now has nearly 500 attorneys, making it Massachusetts’ fourth-largest law firm. It has long represented Biogen Idec—one of the first big biotechnology success stories—and was intimately involved in AOL’s acquisition of Time Warner in 2000. The firm also has major operations in San Diego. And under Burton’s direction, it has developed a booming practice representing clients in the energy and clean technology sectors on both coasts. Many of the firm’ clients turn up regularly in these pages, including EnerNOC, Greatpoint Energy, FloDesign Wind Turbine, General Catalyst, and Rockport Capital.

At Mintz Levin’s office near San Diego’s Carmel Valley, partner Carl Kukkonen tells Bruce, “We represent a lot of small, pre-funded venture-backed companies as well as multi-nationals.” Kukkonen, who was among the lawyers to open the San Diego office in 2006, adds, “I like to tell people I was working with solar, fuel cell, and battery companies before I ever heard of the term ‘cleantech.’”

From Mintz Levin’s 43rd-floor conference room at One Financial Center in Boston, one can peer down on the Federal Reserve building, the Custom House Tower, and every downtown landmark. It’s a far cry from the brick warehouse district of Kendall Square where we scribes at Xconomy spend most of our time—but the visit was an interesting reminder, for me, of all the high-level networking, negotiation, advice, and other homework that goes into getting a technology startup off the ground.

In my interview with Burton and Geffen, portions of which are transcribed below, we covered everything from the state of the cleantech industry and the challenges of working for both startups and venture funds to non-compete agreements and that old chestnut, the difference between East Coast and West Coast investing cultures.

Xconomy: Explain to me how Mintz Levin wound up developing an energy and cleantech practice.

Tom Burton: One thing that’s interesting about Mintz is the entrepreneurial nature of the firm itself, and the way it moves into markets that other firms haven’t placed a bet on. I was pitched that back when I joined the firm in 1996, and I chose Mintz over a lot of safer bets like the Skadden Arpses of the world.

Lewis Geffen: At Sherman and Sterling in New York, where I spent my first five years, no one ever thinks “I have to produce business somehow.” At Ropes & Gray or Wilmer Hale, new associates are simply given work. Whereas we teach “business development 101″ to our associates. It’s part of our fabric here.

TB: For me, all I knew was that I wanted to build something that hadn’t been built before. I wasn’t sure what it was going to be, but I trusted in the firm’s pitch, and took advantage of some luck. When I was a second-year associate, I brought in my first client, who … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • http://www.boston.com/innovation Scott Kirsner

    Wade -

    I always feel that when attorneys jabber on about non-compete agreements and how they are so essential to the culture here, they ought to disclose that attorneys are not subject to them. They’re free to leave Mintz today and go work at Nixon Peabody tomorrow. (This is part of the attorney’s code of conduct, not a state law…although Massachusetts law does exempt doctors, nurses, social workers, and, oddly, TV and radio broadcasters from being bound by non-compete agreements.)

    But while attorneys aren’t restricted by non-competes, they do get to bill plenty of hours representing plaintiffs and defendants in these cases.

    One reason you never hear attorneys arguing to change the status quo with regard to non-competes is that it works wonderfully — for them.

  • http://www.xconomy.com/author/wroush/ Wade Roush

    Scott, thanks for the comment. I see where you’re coming from, but I also think it’s too easy to cynically dismiss every note of resistance to the idea of non-compete reform as the product of rank self-interest.

    Also, I’m not even sure the self-interest argument holds much water in this case. It appears to me that Mintz and the other firms have more than enough work to keep them busy without having to represent clients in employment contract cases–witness the growth of Mintz’s practice in San Diego, and the long list of other successful California venture law firms like Wilson Sonsini.