Photo by Gregory Cowley.
No legal market is hotter in the U.S. than Silicon Valley, and no one embodies its ethos quite like Steven Bochner. A corporate and securities lawyer extraordinaire, he’s counseled countless startups as well as some of the biggest players in the region, including Adobe, NetApp, Autodesk, Aruba Networks, Twitter and Rackspace.
The son of an immigrant Holocaust survivor, his family moved from Chicago to San Diego before settling in South San Jose when he was in elementary school. Steve went to college at San Jose State and then moved across the Bay for law school at University of California, Berkeley, Boalt Hall, where a legendary securities professor recommended that he check out an upstart firm doing interesting work in the nascent Silicon Valley.
Bochner joined Wilson Sonsini Goodrich & Rosati as its 21st lawyer in 1981. The firm now has more than 650 lawyers in 14 offices and handles more venture financings and IPOs in the technology sphere than any other firm. It has also handled more than 500 M&As valued in excess of $150B in the past five years. Bochner was the firm’s CEO from 2009-2012, and is a leading voice for the region as a member of the Federal Reserve Bank of San Francisco's board of directors and co-chair of Joint Venture Silicon Valley. He is also the chairman of the Berkeley Center for Law, Business and the Economy and chairman of the Nasdaq Private Market advisory board.
We sat down to talk about the secret sauce of Silicon Valley – as well as how he became the first lawyer to have a desktop computer at Wilson Sonsini.
Lawdragon: Steve, you are truly a born-and-bred Silicon Valley lawyer. What do you like about practicing there?
Steven Bochner: I’ve got really great clients who are doing amazingly cool things. The diversity and speed at which new technologies are being invented and developed is really astounding — in fact, it feels like the cycle of innovation is spinning even faster now. We’re all so interconnected.
LD: Let’s talk a little about the changes in Silicon Valley law practice over the past 30 years.
SB: When I started practicing law, it was the beginning of the computer revolution. The focus was on computers, disk drives, semi-conductors and other silicon-related technologies. Now the emphasis is on social media, the cloud, mobile, security and a broad range of other emerging technologies that touch everything from how we travel to how we get our news and monitor our health.
In my early years, many of those businesses produced hardware, which was very capital intensive, so they had to raise large amounts of money. Now we’re seeing billion-dollar businesses being created and started on much less capital.
In some industry segments, the infrastructure has already been built — mobile apps are a great example. That’s changing the way startups are getting funded and it’s one of the factors that is accelerating the pace of innovation.
LD: Tell me a bit about how you became an expert on funding new ventures.
SB: It’s been a natural progression. Early in my legal career, I was fortunate to participate in the venture financings, IPOs and mergers of many leading Silicon Valley companies. I then started speaking and writing on various securities law topics, followed by teaching law at Berkeley. That got me further interested in the academic side, which morphed into thinking about regulation and policy-level issues. I was very fortunate to have the opportunity to work with Nasdaq and chair its listing council through the Sarbanes-Oxley era and the governance reforms that Nasdaq helped create.
That leveraged into work on the Securities Exchange Commission’s advisory committee, which fed into the IPO task force, which presented a report to the U.S. Department of the Treasury on improving access to the capital markets for emerging growth companies.
Which plays right into my areas of expertise and experience. Tech is changing the way we interact and communicate, and a good portion of the regulation in the securities law area deals with communication and interaction.
LD: What motivates your work on government and educational efforts to create a strong infrastructure of regulation on capital markets?
SB: That it’s relevant and interesting, first and foremost. It’s also helpful to clients and it's rewarding to help come up with ideas like confidential submissions, which so many companies in Silicon Valley now take advantage of. I was one of two lawyers on the IPO task force [with Joel Trotter from Latham, D.C.] that developed recommendations, many of which became provisions of the JOBS Act.
Confidential submissions have become universal. Companies can also now test the waters and begin talking to investors to get insight into things like pricing, investor interest and the timing of their IPO well before incurring the expenses associated with filing a registration statement.
When you have innovation, when you move from communicating like we did when I started practicing — purely paper based — to being able to tweet and post and have instantaneous communication, it’s a dramatic change in how we get information. Therefore it’s critical that regulation takes these changes into account.
I love being able to contribute in that context. You look at some of the changes in SEC rules that have occurred, including changes brought about by Sarbanes-Oxley and Dodd-Frank, and it’s been a privilege to have had a very small role in that evolution.
LD: You’re a specialist in IPOs. And while I’ve promised not to name drop, let’s just say that you’ve participated in some of the most interesting IPOs of the last few years, and that your firm has a hand in more than its share of the biggest tech IPOs. How have you observed that process change over the years?
SB: The complexity of the process has increased. The size of the company required to interest investors and comply with some of the requirements — for example, the internal controls and governance requirements — results in much larger companies going public now.
When I started practicing, companies with $25M in revenue could access the public markets, now it's $100 million. The number and complexity of the regulatory requirements have increased requiring bigger expense structures.
You’re also seeing more diversity in the industries that Silicon Valley companies specialize in. What was mostly semiconductor, disk drive and a handful of other industries has become a much broader spectrum: from social media to security to health care to biotech. The pace of innovation has also accelerated.
LD: What’s the difference in a high-profile IPO versus a more day-to-day one from the lawyer’s perspective?
SB: The prospectus is the principal document by which investors are offered stock in an IPO. When you have a high-profile IPO with lots of social media and other publicity outlets, it’s challenging to limit communication to a single document. There are legal constraints as to how a company can reach investors. A high-profile deal creates compliance challenges. The amount of attention requires companies to be even more vigilant with the rules around the IPO process.
LD: What type of deal do you consider the most challenging?
SB: I honestly get excited and challenged at all stages. I enjoy working with companies at a really early stage where it’s just three people running around trying to get an idea funded. Certainly IPOs are incredibly exciting because of the publicity and the amount of attention that the companies garner. I also love representing large public companies. That is some of the more sophisticated work that we do, dealing with the day-to-day challenges that large public companies face.
I think it’s important to have diversity in life no matter what you’re doing. It’s fun to be advising a small start-up trying to get funded, and then have your next call be about an IPO followed by a call from a very large public company that has disclosure, governance or other legal challenges.
LD: What’s the common thread for you in those different types of matters?
SB: For me, the practice of law is interesting for two reasons and they both apply regardless of the size of the company or the type of matter. One, handling and dealing with complex legal issues is intellectually challenging. Second, problem-solving and applying legal issues in the business context to solve real business needs is immensely rewarding. I also think being truly interested in what your clients are doing is a big part of job satisfaction for a lawyer and I love being connected to businesses creating new technology and business models.
LD: What’s the secret sauce of Silicon Valley?
SB: Much has been written about the Valley’s magic and secret sauce, which many attempted to reproduce in different venues around the country and the globe. The best answer I can give is that it’s a combination of attributes and intangibles. Certainly having the highest concentration of venture capital firms in the world is a great start. We have a third of all funding in the U.S. occurring just in the Bay Area. In addition, and maybe as a result of that, there’s a celebration of entrepreneurship and a tolerance for risk.
There’s also an acceptance of diversity of viewpoints and cultures. Entrepreneurs from the Greater China region, India and Israel, to name just three geographies, have played significant roles in the development of the Valley. The Valley’s infrastructure is also a contributing factor — the universities, accounting firms, investment banking, and law firms that cater to these unique ventures as they get funded and scale. Finally, as part of this powerful and symbiotic cycle, there is an incredible concentration of really smart people. All of these factors create a fusion of activity and inventiveness that’s been difficult to replicate at scale elsewhere.
LD: It’s also interesting how Silicon Valley has transformed the Bay Area legal world, which used to be based around banks and energy companies in San Francisco.
SB: Absolutely. And you’re also seeing Silicon Valley’s boundaries being pushed out now, so you have to include San Francisco when talking about Silicon Valley, especially South of Market (or SOMA).
In some ways, location still matters, but it matters less. That’s why entrepreneurship is springing up and becoming more robust in places like New York, Austin, Seattle and San Diego. It’s great for those economies and allows people to have a different kind of life-work relationship. It’s amazing how connected we can be without being in an office. Someday soon it may change the way law firms are configured, too.
LD: And in quite a twist, you now have two offices in San Francisco, don’t you?
SB: It’s ironic. Yes, one of our most focused startup offices is in San Francisco. There’s been a complete loop where the big San Francisco firms of the late ‘70s and early ‘80s were doing the significant corporate and securities work and Silicon Valley was the place for startups. Now many bigger companies are being serviced out of Palo Alto and many startups out of San Francisco.
Our SOMA office is completely unlike any law firm office; it much more closely resembles the startup companies it serves. You walk in, there’s a big table, with lawyers and clients working around it together. And a Foosball table and a classic British phone booth nearby.
LD: Do you remember your first deal as a young lawyer? How do your early years counseling the Valley’s entrepreneurs and funders compare with your work today?
SB: On my first deal, I remember that a senior partner told me I’d be working on a closing and I had to run around to a few senior associates and ask what a closing was. I got to work on a number of early disk drive and computer IPOs, including ones for Seagate, Quantum and Altos Computers. And I got to work with other leading companies like Solectron, a pioneer in electronic contract manufacturing, and watch these ventures grow from very small companies to multibillion-dollar businesses.
It’s great to start with a little company, help it grow, and represent them all the way. It doesn’t get any better than that.
LD: What are some of the lessons you’ve learned working with entrepreneurs and funders?
SB: I feel like I learn something at every board meeting. I have the privilege of working with some of the smartest people in the world, not just entrepreneurs and technologists but amazingly smart businesspeople. They teach me constantly and I get paid for it, which is a wonderful thing.
Watching extraordinary business leaders in action helps you understand how to develop your own management style.
I think it’s really important for lawyers everywhere, but especially in Silicon Valley where things move so quickly, to be able to understand what a client’s trying to achieve, what the business context is, and then understand how the legal issues fit into and impact the business decision. I get to help clients understand their range of options. That style of lawyering really is one of the attributes it takes to be successful in a region like this.
It’s a very open, accepting environment and culture, and very merit based. VCs vote with their dollars, employees vote with their feet, customers with their pocketbooks. Typically you know very quickly whether or not you’re going to be successful. It’s a great example of capitalism working well and at an accelerated pace.
LD: What do you consider the three most important skills for a lawyer who wants to make it in Silicon Valley?
SB: First and foremost, great lawyering. Successful technology companies become big and mature quickly and they want the best lawyers for the legal problems they encounter along the way so you have to provide expert, sophisticated advice. Lawyering is number one. That’s fundamentally what we get paid for.
Number two is being able to put the legal issues and options into the business context. You can give more relevant and helpful advice when you do that effectively as opposed to throwing the legal answer over the wall for the client to wrestle with. Clients have a merger to do, a financing, a public offering or a press release to issue, and they want to understand the legal issues, sure, but in the context of the business problems they are trying to solve. They’d also like options and an experienced recommendation if possible. That perspective is important.
Finally, because you’re working with a range of personalities and companies, the ability to relate well to people is essential.
LD: What do you do outside the law? I’ve read you’re a frustrated marine biologist.
SB: When I was a kid growing up in the canyons of San Diego, I was into frogs, lizards and snakes and the ocean. Many people grow out of that, but I never did. I’m still keenly interested in science — in fact, I even have a pet leopard tortoise! That said, I also enjoy a range of other hobbies and sports. My favorite thing to do is skiing — back country and tree skiing, in particular. And I enjoy mountain biking, motorcycling, scuba diving, and playing golf.
LD: What role did Boalt Hall play in the lawyer you’ve become?
SB: I took Richard Jennings’ securities course; he was one of the most famous professors in the field at that time. I was his research assistant and had no idea what I wanted to do. He got me interested in securities and corporate law. And he pointed me in the direction of this law firm.
Aside from getting me interested in corporate and securities law, Boalt gave me the opportunity to be a lecturer at the school for seven years, which really helped me with some of the professional development opportunities that I’ve had. A lot of the teaching led to writing, which led to the role at Nasdaq, and then to the SEC, as an advisor. I truly believe that one’s professional success is derivative of the connections you make and how you’re viewed, and Boalt played a huge role throughout.
Today I’m involved in the Berkeley Center for Law, Business and the Economy, which I chair. I’m also honored to chair the Northwestern Securities Regulation Institute, one of the most influential gatherings of securities, corporate and governance lawyers in the country.
LD: Do you have a favorite deal? And if so, why?
SB: I honestly can’t narrow it down to a single deal, as one of the most rewarding things about my practice is the diversity of matters I’m working on. Companies doing nuclear fusion, 3D printing, storage devices, social media and security software; keeps me busy, keeps me learning, keeps me in touch with some of the most interesting, cutting-edge technologies of our time. I’m very fortunate.
LD: And you’ve mentioned you had the first personal computer at Wilson Sonsini?
SB: I did! I was the first person at the firm circa 1982-83 to have a personal computer on my desk. I worked on the Eagle Computer IPO, and they gave me a computer to use.
The extent of my capabilities was turning it on and off. Someone who studied political science and economics didn’t know what to do with a blinking cursor. And people would come in and say what’s this? I’d show them the blinking cursor.