L..A. Practice Notes

Big Firms Move Into L.A.

When it comes to entertainment law, the big legal players have traditionally emerged from firms that sprung up in Los Angeles, the industry's hometown. But increased lateral movement, coupled with a widening emphasis on technology, has out-of-town firms such as Milwaukee-rooted Foley & Lardner seeing an opportunity to carve out their own entertainment niche. A decade after opening its Los Angeles office, Foley is breaking into the area's signature ' and lucrative ' industry, seeking to build a top-notch entertainment practice from the ground up. Since its official entertainment launch a year ago, the firm has attracted top talent and is relying on those key lateral hires to lead the way.

'The entertainment industry is very relationship-oriented, and there's a lot to developing those relationships over time,' says Miriam Beezy, co-chair of the firm's entertainment team. 'Some of my clients were surprised because they hadn't thought of Foley in entertainment.'

The firm began hiring laterals that already had key client relationships, and built a practice that would parlay its established technology expertise. When Beezy joined Foley & Lardner in 2004, it was an adjustment, she says. She was used to working at firms such as Greenberg Glusker Fields Claman & Machtinger and Mitchell Silberberg & Knupp ' two smaller, L.A.-based firms with strong entertainment reputations. In 2005, billing rates in the entertainment practice of Foley & Lardner jumped 14%, Beezy says, and its existence alone is helping Foley boost its reputation in the L.A. market.

Recruiting well-known names such as Carole Handler and M. Kenneth Suddleson, both of whom joined Foley recently, is a smart strategy, say industry observers. 'I know Suddleson and Handler, so I am not sure it matters if the firm is known,' says Mark Litwak, a Beverley Hills entertainment lawyer and law professor. 'They're going to start out with a bunch of clients in the business ' it's not like they're starting from scratch.'

'Traditionally, larger law firms have represented studios, networks or corporate sides of the entertainment industry,' says Howard Weitzman, an entertainment attorney with Kinsella Weitzman Iser Kump and Aldisert. 'The smaller boutique firms more often work with talent business be-cause they more readily agree to a percentage billing arrangement rather then the traditional hourly fee.'

It's not unprecedented for a non-L.A. firm to nose into the insular area. Large out-of-town firms, such as Proskauer Rose and Skadden, Arps, Slate, Meagher & Flom, have made a relatively successful entertainment push in Los Angeles, says legal consultant Peter Zeughauser. And large L.A.-based firms, such as Gibson, Dunn & Crutcher, have found work on the corporate and transactional sides, he says.

The increasing convergence of technology and entertainment has opened the door for firms that have a strong intellectual property practice and want to use that expertise to edge into entertainment, Zeughauser says. One of Handler's recent cases involved representing Marvel Enterprises in a copyright suit against the makers of the computer game, 'City of Heroes.' The game allows players to create their own superheroes, but Marvel claimed the characters could be too similar to the its copyrighted 'Hulk,' 'X-Men' and other comic book characters.

The case, which settled last year on undisclosed terms, underscored the importance of merging an IP practice with a traditional entertainment one, says James Nguyen, the Foley IP partner who hatched the idea of the firm's entertainment practice, along with Beezy.

Suddleson says he was drawn to Foley in large part because its 950 lawyers in offices across the globe allow it to fully service a client's needs. Suddleson was most recently co-chairman of Morrison & Foerster's entertainment group, and has also worked at Irell & Manella, Loeb & Loeb and in- house at Paramount Pictures. After 30-years of practicing, Suddleson's clients range from major motion picture studios to Internet-based entertainment ventures. 'Virtually all my clients have gone with me to Foley,' he says.

It's becoming increasingly more common for seasoned L.A. entertainment lawyers to move around ' and often clients follow that relationship, says Foley's Handler, who joined from Proskauer Rose.

But despite the movement within the industry, there is still a pretty small circle of entertainment clients ' and they tend to stick with well-known names, according to Robert Fortunato, a Southern California law firm consultant. When big names are poached, it's usually because they're promised a bigger leadership role, or they're looking for a strategic convergence between practice areas that a certain firm may offer, says Fredric Bernstein, a longtime entertainment lawyer who jumped from Manatt, Phelps & Phillips to Proskauer Rose in May to beef up that firm's transactional entertainment practice.

Convergence ' the marriage of entertainment and technology ' is the new buzzword. And Silicon Valley law firms have been converging on Hollywood. For example, Yahoo! Inc., is partnering with Spanish TV network Telemundo to offer Spanish Web content and television programming to its users; and BitTorrent, the San Francisco-area-based purveyor of download technology, has landed a licensing deal to distribute some of Warner Bros.' top films.

And where clients go, lawyers follow. A slew of Silicon Valley firms with strength in technology and intellectual property have been focusing on digital media ' marketing themselves as much better positioned to help clients straddle the world of entertainment and technology than their Hollywood counterparts.

Orrick, Herrington & Sutcliffe's 120-lawyer IP litigation group is hoping the current emphasis on technology in Hollywood will foster more patent litigation. The firm's IP practice, based in Silicon Valley, has been heavily concentrated in the semiconductor space. But as technology increasingly plays a central role in the delivery and creation of music, movies, television shows and video games, firm leaders see potential patent fights in the entertainment industry as an area of expansion.

Patent disputes are still a rare occurrence for movie studios. Studios are often protected from such suits because they rely mostly on third-party contractors to supply them with the technology they use in film production. But now that some entertainment companies are acquiring or partnering with small technology vendors and Internet companies to help distribute their products, they could be vulnerable to patent suits. (As of May, only one active patent case involved movie studios. An obscure company called Digital Dailies & Previews has sued 15 film companies ' including Columbia Pictures, MGM and Twentieth Century Fox ' for infringing on its patent covering a method of editing motion pictures in high-definition video for previews.)

Orrick Herrington partner Vickie Feeman notes there has been a noticeable shift in the way studios farm out their litigation as cases have become increasingly high-tech. Orrick, for example, recently represented Universal Studios' amusement park division in a patent dispute over an amusement park ride.

One firm that has so far successfully leveraged its IP practice in the digital media realm is Weil, Gotshal & Manges. The firm is among the first to combine its IP litigation practice with its media practice, and has attracted clients from both the technology and entertainment industries. The firm's specialty, according to Weil partner Kenneth Steinthal in San Francisco, is addressing various 'convergence' issues as they apply to new technologies. Steinthal, co-chairman of the firm's IP/media practice, represents AOL, Microsoft and Yahoo before the U.S. Copyright Office in the ongoing litigation over royalties for Internet music streaming. He is also representing German media conglomerate Bertelsmann AG in copyright-infringement lawsuits, and several cable and satellite television channels, in disputes over music royalties. Weil Gothal's IP/media group has also generated a number of patent litigation cases for clients such as Sony, Apple and Yahoo.

Although litigation is still the main reason law firms are flocking into the digital-media space, firms such as Wilson Sonsini Goodrich & Rosati are making big money focusing on the transactional side of the digital media business. The growing collaboration between entertainment companies and technology firms has generated a considerable amount of complex licensing and counseling work, according to Wilson partner Catherine Kirkman, who used to work as an entertainment lawyer at Loeb & Loeb in Los Angeles.

'Many of the deals in this area require a deep understanding of technology and intellectual property issues,' Kirkman says, pointing to digital rights management ' anti-copying technology ' as such an issue. 'You don't do a media licensing deal, for example, without talking about what kind of DRM technology you're going to use to license your content.'

Big Firms Move Into L.A.

When it comes to entertainment law, the big legal players have traditionally emerged from firms that sprung up in Los Angeles, the industry's hometown. But increased lateral movement, coupled with a widening emphasis on technology, has out-of-town firms such as Milwaukee-rooted Foley & Lardner seeing an opportunity to carve out their own entertainment niche. A decade after opening its Los Angeles office, Foley is breaking into the area's signature ' and lucrative ' industry, seeking to build a top-notch entertainment practice from the ground up. Since its official entertainment launch a year ago, the firm has attracted top talent and is relying on those key lateral hires to lead the way.

'The entertainment industry is very relationship-oriented, and there's a lot to developing those relationships over time,' says Miriam Beezy, co-chair of the firm's entertainment team. 'Some of my clients were surprised because they hadn't thought of Foley in entertainment.'

The firm began hiring laterals that already had key client relationships, and built a practice that would parlay its established technology expertise. When Beezy joined Foley & Lardner in 2004, it was an adjustment, she says. She was used to working at firms such as Greenberg Glusker Fields Claman & Machtinger and Mitchell Silberberg & Knupp ' two smaller, L.A.-based firms with strong entertainment reputations. In 2005, billing rates in the entertainment practice of Foley & Lardner jumped 14%, Beezy says, and its existence alone is helping Foley boost its reputation in the L.A. market.

Recruiting well-known names such as Carole Handler and M. Kenneth Suddleson, both of whom joined Foley recently, is a smart strategy, say industry observers. 'I know Suddleson and Handler, so I am not sure it matters if the firm is known,' says Mark Litwak, a Beverley Hills entertainment lawyer and law professor. 'They're going to start out with a bunch of clients in the business ' it's not like they're starting from scratch.'

'Traditionally, larger law firms have represented studios, networks or corporate sides of the entertainment industry,' says Howard Weitzman, an entertainment attorney with Kinsella Weitzman Iser Kump and Aldisert. 'The smaller boutique firms more often work with talent business be-cause they more readily agree to a percentage billing arrangement rather then the traditional hourly fee.'

It's not unprecedented for a non-L.A. firm to nose into the insular area. Large out-of-town firms, such as Proskauer Rose and Skadden, Arps, Slate, Meagher & Flom, have made a relatively successful entertainment push in Los Angeles, says legal consultant Peter Zeughauser. And large L.A.-based firms, such as Gibson, Dunn & Crutcher, have found work on the corporate and transactional sides, he says.

The increasing convergence of technology and entertainment has opened the door for firms that have a strong intellectual property practice and want to use that expertise to edge into entertainment, Zeughauser says. One of Handler's recent cases involved representing Marvel Enterprises in a copyright suit against the makers of the computer game, 'City of Heroes.' The game allows players to create their own superheroes, but Marvel claimed the characters could be too similar to the its copyrighted 'Hulk,' 'X-Men' and other comic book characters.

The case, which settled last year on undisclosed terms, underscored the importance of merging an IP practice with a traditional entertainment one, says James Nguyen, the Foley IP partner who hatched the idea of the firm's entertainment practice, along with Beezy.

Suddleson says he was drawn to Foley in large part because its 950 lawyers in offices across the globe allow it to fully service a client's needs. Suddleson was most recently co-chairman of Morrison & Foerster's entertainment group, and has also worked at Irell & Manella, Loeb & Loeb and in- house at Paramount Pictures. After 30-years of practicing, Suddleson's clients range from major motion picture studios to Internet-based entertainment ventures. 'Virtually all my clients have gone with me to Foley,' he says.

It's becoming increasingly more common for seasoned L.A. entertainment lawyers to move around ' and often clients follow that relationship, says Foley's Handler, who joined from Proskauer Rose.

But despite the movement within the industry, there is still a pretty small circle of entertainment clients ' and they tend to stick with well-known names, according to Robert Fortunato, a Southern California law firm consultant. When big names are poached, it's usually because they're promised a bigger leadership role, or they're looking for a strategic convergence between practice areas that a certain firm may offer, says Fredric Bernstein, a longtime entertainment lawyer who jumped from Manatt, Phelps & Phillips to Proskauer Rose in May to beef up that firm's transactional entertainment practice.

Convergence ' the marriage of entertainment and technology ' is the new buzzword. And Silicon Valley law firms have been converging on Hollywood. For example, Yahoo! Inc., is partnering with Spanish TV network Telemundo to offer Spanish Web content and television programming to its users; and BitTorrent, the San Francisco-area-based purveyor of download technology, has landed a licensing deal to distribute some of Warner Bros.' top films.

And where clients go, lawyers follow. A slew of Silicon Valley firms with strength in technology and intellectual property have been focusing on digital media ' marketing themselves as much better positioned to help clients straddle the world of entertainment and technology than their Hollywood counterparts.

Orrick, Herrington & Sutcliffe's 120-lawyer IP litigation group is hoping the current emphasis on technology in Hollywood will foster more patent litigation. The firm's IP practice, based in Silicon Valley, has been heavily concentrated in the semiconductor space. But as technology increasingly plays a central role in the delivery and creation of music, movies, television shows and video games, firm leaders see potential patent fights in the entertainment industry as an area of expansion.

Patent disputes are still a rare occurrence for movie studios. Studios are often protected from such suits because they rely mostly on third-party contractors to supply them with the technology they use in film production. But now that some entertainment companies are acquiring or partnering with small technology vendors and Internet companies to help distribute their products, they could be vulnerable to patent suits. (As of May, only one active patent case involved movie studios. An obscure company called Digital Dailies & Previews has sued 15 film companies ' including Columbia Pictures, MGM and Twentieth Century Fox ' for infringing on its patent covering a method of editing motion pictures in high-definition video for previews.)

Orrick Herrington partner Vickie Feeman notes there has been a noticeable shift in the way studios farm out their litigation as cases have become increasingly high-tech. Orrick, for example, recently represented Universal Studios' amusement park division in a patent dispute over an amusement park ride.

One firm that has so far successfully leveraged its IP practice in the digital media realm is Weil, Gotshal & Manges. The firm is among the first to combine its IP litigation practice with its media practice, and has attracted clients from both the technology and entertainment industries. The firm's specialty, according to Weil partner Kenneth Steinthal in San Francisco, is addressing various 'convergence' issues as they apply to new technologies. Steinthal, co-chairman of the firm's IP/media practice, represents AOL, Microsoft and Yahoo before the U.S. Copyright Office in the ongoing litigation over royalties for Internet music streaming. He is also representing German media conglomerate Bertelsmann AG in copyright-infringement lawsuits, and several cable and satellite television channels, in disputes over music royalties. Weil Gothal's IP/media group has also generated a number of patent litigation cases for clients such as Sony, Apple and Yahoo.

Although litigation is still the main reason law firms are flocking into the digital-media space, firms such as Wilson Sonsini Goodrich & Rosati are making big money focusing on the transactional side of the digital media business. The growing collaboration between entertainment companies and technology firms has generated a considerable amount of complex licensing and counseling work, according to Wilson partner Catherine Kirkman, who used to work as an entertainment lawyer at Loeb & Loeb in Los Angeles.

'Many of the deals in this area require a deep understanding of technology and intellectual property issues,' Kirkman says, pointing to digital rights management ' anti-copying technology ' as such an issue. 'You don't do a media licensing deal, for example, without talking about what kind of DRM technology you're going to use to license your content.'