Townsend Chairman to Step Down

Townsend and Townsend and Crew Chairman James Gilliland Jr. will step down after nine years, according to sources familiar with the firm. He is expected to be succeeded by managing partner Maureen Sheehy, those sources said, speaking on the condition of anonymity because no announcement has been made.
Sheehy will have a lot on her plate. The intellectual property firm has faced a slowdown in litigation and patent prosecution, the San Francisco-based firm's two main practices. Some partners in the firm are also pushing to explore merger opportunities, sources said.
Brian Colucci, a firm spokesman, said the partnership will have a vote on the new management early next year and won't know anything until then. "There will be management changes next year, but we have a process to go through," he said.
To the talk of mergers, Colucci said, "We're an independent firm and we're committed to staying that way." The spokesman said that neither Gilliland nor Sheehy would be available for comment Wednesday.
A solid, straight shooter and a rainmaker, Gilliland took the reins in 2001, leading the firm through the dot-com bust that caused other IP firms, like Skjerven Morrill, to fail. He's in his third three-year term as chairman. Under Gilliland's watch, the firm has seen some very profitable years, in part because of some huge contingency fees. Townsend's profits per partner hit $1.4 million in 2006 thanks to a big win against Microsoft Corp. (PPP came down to earth the next year, nearly cut in half). The firm has also expanded, which included opening a new office in Washington, D.C., last year, and grown to more than 200 lawyers.
"They've had a good run," said Peter Zeughauser, a law firm consultant. "They're highly regarded in the IP area."
But the recent recession has put pressure on the firm, which is also struggling against the countervailing winds that are buffeting all IP boutiques: low margins on patent prosecution, and more patent litigation shifting to general practice firms, according to Zeughauser.
In April, Townsend laid off 45 staff and 16 lawyers. At the time Gilliland cited a slowdown in the normally more resilient patent litigation and prosecution practices. Then in September, the firm announced it would cut associate salaries next year.
Townsend isn't the only IP-focused firm to be affected by the downturn. Fish & Richardson, a national IP firm, laid off lawyers this year as well.
Gilliland came to Townsend when his firm of litigators, Khourie Crew & Jaeger, was acquired in 1993. He took a leadership role in the 1990s and then was elected chairman in late 2001. Part of the challenge at Townsend has been to keep both the litigators and the patent prosecutors, whose interests are not always aligned, happy.
Sheehy also came to Townsend through a merger, but more recently in 2004, when her small band of litigators at the Legal Strategies Group was absorbed into Townsend. She has been Townsend's managing partner for the last two years, Gilliland's No. 2. Although she has yet to be voted in, she has been designated to succeed him, sources said.