Sonsini Declines an Offer to Lead Exchange
Larry W. Sonsini, widely considered the most powerful lawyer in Silicon Valley, is paid millions of dollars a year to make tough decisions. Perhaps one of his toughest came this week, as he pondered -- and ultimately rejected -- an offer to lead the New York Stock Exchange after Chairman Richard Grasso abruptly resigned.
Several factors convinced him to say no, according to people familiar with his deliberations. They included Sonsini’s preference for working away from the limelight and his reluctance to hand off the stewardship of his elite Palo Alto law firm, Wilson Sonsini Goodrich & Rosati.
The offer came in Wednesday afternoon. Sonsini gathered a handful of the firm’s senior partners around the oval mahogany table in his understated corner office and conferred for a couple of hours. The partners said the firm would suffer if he went to New York, but left the decision to him.
“He’s very committed to the law firm, and I don’t know how you could do both,” said a Wilson Sonsini employee who asked not to be named.
As an expert in corporate governance, Sonsini was aware of the NYSE’s rules in the event of a power vacuum.
The rules say that the lead director -- in this case former New York State Comptroller H. Carl McCall -- should take over.
“He seriously considered it, but Larry has a lot of confidence in the board’s structure,” said one person privy to Sonsini’s debate with confidantes.
Sonsini declined to discuss the matter.
Though several executives who have worked with Sonsini said they were disappointed that he didn’t accept the NYSE offer, not all were surprised.
Taking the top job would have been a major step into the spotlight for the unassuming 62-year-old.
An NYSE director since 2001, Sonsini joined the firm now bearing his name in 1966, after graduating from UC Berkeley’s Boalt Hall law school.
Wilson Sonsini is now one of the largest legal practices in Northern California. Among its blue-chip clients: Hewlett-Packard Co., Gap Inc. and Apple Computer Corp.
The firm makes most of its money on mergers and acquisitions, litigation and the deal-making that is the Valley’s lifeblood.
According to American Lawyer magazine, Wilson Sonsini grossed $387 million last year, surpassing the $296 million it took in during 1999, the last full year of the tech boom.
Sonsini is probably best known for advising HP in its controversial $19-billion acquisition of Compaq Computer Corp.
Compaq was seeking a unanimous resolution from the HP board of directors in support of the deal, but HP scion Walter Hewlett harbored significant doubts about the merits of the merger.
Though Hewlett went on to mount a serious public battle to derail the acquisition, Sonsini convinced him to back the deal in his capacity as a director.
That, say people who know Sonsini, underscores just how persuasive he can be.
Equally impressive is his ability to inspire trust even when he is representing two arch competitors, such as HP and Sun Microsystems Inc.
Scott McNealy, Sun’s chief executive, said he has often relied on Sonsini for strategic advice since he co-founded the computer server maker in 1982.
“He’s kind of like my dad,” McNealy said this week. “He has super-high integrity, he’s smart as all get-out, and he’s seen everything.”
Sonsini has evolved over the years into one of the wise men of Silicon Valley, widely praised for his foresight.
“Fresh out of law school, Larry correctly identified the importance of innovation and technology when he opened shop in a valley of orchards,” said venture capitalist John Doerr of Kleiner Perkins Caufield & Byers.
Sonsini is also known for his work ethic, having logged as many as 2,500 billable hours a year. Colleagues and friends say he displays no evidence of ego inflation, on occasion answering his own office phone.
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Times staff writer Lisa Girion contributed to this report.
