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

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ran up a nice bill and promptly went under. But one of our partners said, “Don’t worry about it—keep trying,” which was really unusual. So we started doing work for the Massachusetts Technology Collaborative, whose main statutory mandate was to build a cleantech cluster. That gave me an in to that world. I worked with Lewis on the first couple of deals with Rockport Capital, a small venture fund that had less than $100 million under management, meaning it was not that exciting to other firms but we were willing to do it.

Then around 2004, I was asked to join the program committee of the MIT Enterprise Forum. As the new guy, I was told “You’ve got November—what do you want to do?” I looked at my four clients and said “How about energy technology?” No one called it cleantech yet. I had randomly met Dan Reicher, the head of the energy efficiency and renewable energy portfolio at the Department of Energy in the Clinton Administration, so I got him to be the keynote. I’d just met Tim Healy at EnerNOC and had started doing his work, which we had pulled out of Testa Hurwitz. Over 200 people showed up, and that’s when I said, “You know, there’s something here. This is a real movement, and it’s going to be big.”

So I plowed 100 percent of my time into growing a practice. I made partner about a year after that, and [Mintz member] Peter Demuth said “Go do it, create a practice group, start a newsletter.” That was four and a half years ago, and today the newsletter has 3,000 people subscribed. A lot of people are taking advantage of the ground we’ve built, but in Boston there is not much competition. Foley Hoag and Wilmer Hale [have cleantech practices] but no one does nearly the transactional activity we do, or has the same size of clients. We have 12 to 15 venture fund clients and 30 to 40 companies, as well as some utility work and project finance. The word on the street is that there are 70 finalists for the new ARPA-E [Advanced Research Projects Agency, Energy] R&D solicitations, and we are counsel for seven of those companies. That’s a 10 percent hit rate, which is pretty unusual.

Lewis GeffenX: Isn’t it also kind of unusual for a law firm to be making bets on specific technology areas like cleantech?

LG: On a macro level, getting into a new space like cleantech broadly is a combination of making a bet and being in the right place at the right time. We will certainly ask the question of whether this something more than a flash in the pan, and whether it is something that is going to provide the type of legal work that we excel in giving.

TB: It’s got to be high-end to support our rates [laughs]. So early on, we ask if this is something where venture is going to play. In cleantech, the firm was supportive because of our success in other industries like biotech, which informed the firm as to how you could make it happen. The firm didn’t hand me a bucket of money—I had to lead the charge. But if we hadn’t had success in the biotech space, or if we hadn’t had an AOL, somebody from management would probably have put the brakes on.

X: Are there potential downsides for a bet like this? Is it fair to say you’ll earn fees whether the industry succeeds or not?

TB: If the whole cleantech thing turns out to be a bust, the firm will have made some money and been profitable, but not nearly as much as if there is a … Next Page »

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Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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  • 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.

  • 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.