2 O.C. Deal Makers Leave Law Firm to Back Tech Ventures

Two lawyers who helped put Orange County’s technology industry on the map, aiding the drive of companies like Broadcom Corp. to national prominence, are leaving their firm to start a venture capital fund.

Bruce Hallett and Richard Fink--rainmakers and behind-the-scenes deal makers at Brobeck, Phleger & Harrison LLP’s Irvine office--said they hope to manage about $150 million in assets and that Broadcom co-founder Henry Samueli will be one of their prime backers.

“We will focus on growth-stage tech companies that are based in Southern California,” allett said. “That’s where we see the gap in the market. Not many funds are headquartered here.”

While many venture funds raise money from institutional investors, Hallett and Fink said they will rely on a circle of limited partners like Samueli, all of whom are executives at tech companies. They would not say how much Samueli will invest or who the other limited partners will be. Samueli could not be reached for comment.

The two Brobeck partners plan to leave the law firm Jan. 1 to launch their venture operation.

“Their commitment to technology and entrepreneurial ventures helped bring visibility to Orange County as a distinct market,” said Brett Williamson, a partner at the Irvine office of rival O’Melveny & Myers LLP.

Hallett said the venture firm will be based in Corona del Mar and have offices in San Diego as well. Its focus will be technology companies throughout Southern California. Hallett, 44, and Fink, 45, will be managing partners, and the company eventually will have seven to 10 employees.

“We’re just starting, but we hope to have our first close [of fund-raising] at $100 million early next year,” Hallett said. A $150-million venture fund, he acknowledged, is not big but “a good medium-size fund for Southern California.”

He said he and Fink already are considering investments in several area companies, which he wouldn’t name yet.

Brobeck’s Irvine technology group, led by Hallett and Fink, has played a pivotal role in nurturing Broadcom, Buy.com Inc., PairGain Technologies Inc. and dozens of other tech firms from fledglings into public companies.

An old-line banking and litigation firm, San Francisco-based Brobeck saw Silicon Valley start to take off and jumped in to provide legal help in the 1970s. It has grown to about 900 lawyers, including about 60 in Orange County, where 80% are involved in various aspects of technology work, Hallett said.

Word of the move sent equal parts excitement and anxiety rippling through the region’s business community. The pair’s transition could energize the region’s technology industry as the public markets flag, pumping in much-needed investment, some observers said.

But it also could signal a shift in power away from Brobeck, which has had its pick of Orange County clients.

“It’s great for [Hallett and Fink], but it does call into question what’s going to happen here,” said one Brobeck associate who spoke on the condition of anonymity.

Williamson managed not to gloat--barely. “I can’t say I’m disappointed,” he said. “It does represent an opportunity.”

Fink said he and Hallett decided to make the jump now partly because they believe Brobeck’s practice is secure.

Brobeck was among the first of Silicon Valley’s top law firms to recognize Orange County’s potential as a technology center. Hallett and Fink led the firm’s corporate practice throughout the 1990s, serving sequential terms as the Irvine office’s managing partner.

Broadcom was their signature client. The Irvine chip maker’s spectacular initial public offering in 1998 gave Brobeck’s Orange County office clout in the local tech industry.

Lately, with tech stocks taking a pummeling, the timing of their decision to change professions might seem suspect, but Hallett called the rapidly deflating public markets an asset to private investors.

“The valuations are more realistic,” Hallett said. Many existing venture funds are preoccupied with rescuing their foundering portfolios, rather than seeking out new opportunities, he said.