Accolades for S&W

Sullivan & Worcester LLP

THE VALUE PROPOSITION

1. About Us, With Special Emphasis on "Effectiveness" a/k/a Quality and "Efficiency" (Attention to Controlling unnecessary Costs). The U.S. News & World Report "America's Best" rankings¹ of law firms are posted online at http://bestlawfirms.usnews.com/firms/sullivan-worcester-/overview/16978/. In 2010 Sullivan & Worcester was (out of over 500 firms surveyed) one of 27 firms nationally ranked Tier 1 in corporate law and one of 36 firms ranked Tier 1 in tax ... and one of only fifteen firms ranked in Tier 1 in both, our peers in that regard ranging from twice to ten times our size. Ratings vary year by year, depending on client surveys. That said, Tier 1 nationally in two key areas was a breakthrough for a firm our size.

   This year, we wound up in Tier 2 nationally in corporate and tax (ratings vary year to year) but we added tax litigation to Tier 2 and the we hit Tier 1 among firms in Boston in Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law, Corporate Law, Litigation "“ Tax, Non-Profit/Charities Law; and Tax Law. ² In short, we are at the top or right next to it all over the place. The breakthrough is significant in terms of quality and cost control . As the only midsized firm to hit Tier 1 nationally in both corporate and tax in 2010. We beat any number of firms 5 to 10 times our size. And, we continue lean and mean, having eschewed the multiplex model. If the law profession were not intramurally polite (litigators used to call each other "my brother") I could have fun asking you to name a household word in this business ... a famous law firm, the chain store 1500 lawyer variety ... and then show how we skunked the same in the 2010 rankings ... and in 2011 as well. Take a quick look at the fourteen firms which shared 2010 Tier 1 in corporate and tax with us as named in the Appendix. Pretty good company for a midsized firm. For the 2011 pictures, check out the firms with whom we shared corporate and tax, nationally: http://bestlawfirms.usnews.com/search.aspx?practice-area-id=14&practice-area=CorporateLaw and http://bestlawfirms.usnews.com/search.aspx?practice-area-id=134&practice-area=Tax+Law&order-by=practice-area&page=1.

   Drilling down on why size matters in terms of controlling costs, "midsized," as per our plan, equals elite, efficient and effective; every lawyer on the deal is on site or within the same time zone; lower fixed costs per unit of output since excess leverage is expensive; fewer conflicts; no gang tackling; collegial approach, driven by ease of internal communication; international reach (35% of our practice) through alliances and dual admissions (Israel, Ireland, India, France, etc.) without paying local rent, taxes or administrative salaries; the old fashioned approach ... a profession vs. a "business."

2. Cost Control Combined with Client Education: A Win/Win Strategy

   The Win/Win strategy is explained in depth in a long winded memo entitled, "Meeting Clients Halfway." Here is the link: http://joebartlettvc.com/sites/default/files/MEETING%20CLIENTS%20HALFWAY%20(PDF)%20(N0133037).PDF. Let me quote (and I apologize for the length but I am passionate on the subject) from the piece:

   A. Model Forms. Model forms are available on line ... from, for example, the National Venture Capital Association (www.nvca.org), and from commercial vendors. Most large firms maintain internal libraries of model forms, in some cases lightly annotated; in fact even if a central library is not maintained, a lawyer in need can go onto the firm's internal grid and ask for a model form, usually with positive results. Legal treatises, replete with exemplars of model forms, come accompanied by digitized versions since many are now both "tree" and E-books.³ Thus, when a client calls for a given agreement, plus explanations of its constituent parts, a real time response is available from multiple platforms; the lawyer picks from her favorite portable (i.e., digitized) library (which in my case, and for over half the AmLaw 200, is VC Experts)⁴ and clicks "˜send.. Bingo, the first draft has arrived. The trick at this point is to coach the client, if agreeable, into filling in the blanks ... names, addresses, numbers, bank accounts and sending the document back often accompanied by the questionnaire referred to in Section B below.

   B. Questionnaires. Our prep work frequently starts off with questionnaires, designed to extricate in advance from clients their take on the critical metrics inherent in their deals.⁵ Thus, when the Newco is an LLC, we urge the founders, if more than one (including particularly the members of the general partner of a venture, hedge or private equity fund), to fill out a questionnaire, see link to the example, which deals with critical, and often overlooked issues ... generally in the category of "it's not the marriage, it's the divorce."

   C. Checklists. A related concept is the proffer of a checklist.⁶ An example is the "MAC" checklist which goes down, point-by-point, the issues which have arisen in court rooms around the country, and particularly the Delaware Chancery Court, on this issue. For each contingency the list indicates: "Yes this is, based on precedent, likely to be a material adverse change." "No, this is not." The clients then can make sure the lawyers and bankers keep going down the list until the parties have exhausted the examples from history, plus those added to the list by creative lawyers and other professionals in this sector. Our Privacy and Data Security Group a/k/a the "fire brigade," has developed an "audit checklist" to help clients, particularly those lacking a privacy officer, identify areas of potential vulnerability (and/or confirm that appropriate safeguards are in place). The audit is designed cost-effectively to "issue spot" for clients. The audit checklist pinpoints vulnerabilities and identifies specific action items to help patch up such exposures and develop action plans to remain compliant. This is, typically, a modestly priced, fixed cost exercise, then followed up with hands-on advice about fixing legal problems discovered during the process. http://www.sandw.com/assets/attachments/PRIVACY%20DATA%20SECURITY%20Profile%20B1131244.PDF

   D. Pre-Money Valuation . VC Experts, in its Key Investment Trends portal, takes the deals reported in the PWC Money Tree Survey each quarter, segregates them by region and industry sector, and gives the client (at the click of a mouse) pre- and post-money valuations. In both venture and buyout investing, the final decision is often based on the "˜money see, monkey do" concept, particularly in venture. Even the most experienced investors, after due diligence and all the other tests they run through to reach the goal line on valuation, inquire (as best they can) on what others in the venture business are paying pre-money for, e.g., San Diego bio tech companies in Phase 2. Without reliable data on comparables, the parties are relying on anecdotes; clients, both the buy and sell side, should, and can in my world, be able to access the comparables, averaged and presented in analytically friendly formats.

3. Finding Money. There is a feeling in the law community that lawyers, particularly those at major national and international law firms, should be in a prime position to assist a client ... typically but not exclusively an emerging growth company embarked on a trip, as I put it, "from the embryo to the IPO" ... in its relentless, never-ending search for investment capital. We do not pretend to be placement agents or to be particularly adept at helping clients raise capital, nor do we charge for any time spent "˜match making,' so to speak; and we are not registered as brokers. However, we like to act as traffic cops pointing our clients in various directions so that, assuming (as we do) that the process is viral, the meetings can be productive either by resulting in commitments or in leads to sources of capital which might well be worthwhile. The most precious commodity is, as you know, the time it takes to go from pillar to post in looking for capital and we do our best to try to short cut that process.

4. Litigation. See the link http://www.law.com/jsp/cc/PubArticleFriendlyCC.jsp?id=1202429793034 to an article by Barry Pollack and Josh Solomon for an expression of our Value Proposition in a legal sector, litigation, often marked by eye popping numbers doled out to plaintiff's and defendant's counsel.

5. 5. My Areas of Personal Expertise. In 50 years of practice, I have been involved in a variety of financial sectors, e.g., IPOs (numerous), investment companies (Madison Fund for 10 years; Liberty Financial), banks (Harbor National), and S&Ls (Northeast Federal). On the specifics we discussed:

   A. LBOs. On leveraged buyouts, I was the lawyer representing both Bain Capital and Chemical Ventures (now JPMorgan Chase) when they started in business. I am the primary author of what I like to think is the treatise on LBOs. See a description of the firm's Private Equity practice http://www.sandw.com/assets/attachments/PRIVATE%20EQUITY%20profile%20B1192559.PDF

   B. M&A. I have been involved in a number of M&A transactions, the largest of which was $3 billion ... for the target (Tandem Computer) into Compaq. The most recent was California Products, bought out by Apollo ($80 million). I use my colleague, Ed Miller's, handbook on M&A Mergers & Acquisitions, A Step-By-Step Legal and Practical Guide (Wiley, 2007).

   C. High Yield Debt and Creditors Rights. I spent three years sorting out the remains of Drexel as counsel to the DBL Liquidating Trust. We processed close to $3 billion of junk/high yield debt through the Trust for the benefit of savvy trust certificate buyers and faced, as you can imagine, 100% of the thorny issues high yield, a la Michael Milken, could generate. And I have been in and out of bankruptcy proceedings ... e.g., WorldCom, Charles Brennick (court appointed trustee), Boston and Maine.

   D. Venture. I take my cue from the medical profession ... professor, writer/researcher and practitioner, the triple-threat.

   • The Daily Deal "If someday a supreme court for venture capital were to be created, Joe would be the chief justice ..."

   • Business Law Today: "Bartlett literally wrote the book on venture capital financings ... ." In fact, there are several books: LBOs, executive compensation, restructurings and reorganizations and, coming up, fund formation;

   • "Getting to hear the master who wrote the fundamental texts about venture capital agreements is a rare treat ... I'll sign up for all your MasterClass Workshops taught by Joe Bartlett." Neil C. Kleinhandler, Partner, Philips Nizer .

APPENDIX

Firms in Tier 1 in 2010 both corporate and tax

Bingham McCutchen

Cravath, Swaine & Moore

Davis Polk & Wardwell

Debevoise & Plimpton

Kirkland & Ellis

Latham & Watkins

Mayer Brown

Paul, Weiss, Rifkind, Wharton & Garrison

Ropes & Gray

Simpson Thacher & Bartlett

Skadden, Arps, Slate, Meagher & Flom

Sullivan & Cromwell

Sullivan & Worcester

Weil, Gotshal & Manges

June 2011

Chambers USA: America's Leading Lawyers for Business named several S&W lawyers among the top in the United States:

• In Massachusetts: Bankruptcy/Restructuring, Employee Benefits & Executive Compensation, Labor & Employment, Litigation: White-Collar Crime & Government Investigations, and Tax
  
  
  

• In Washington, D.C.: Intellectual Property