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FORTUNENovember 27, 2006 THE MAN T O SEE IN THE VALLEY FROM APPLE TO NETSCAPE TO HEWLETT-PacKARD TO YOUTUBE, LARRY SONsiNI HA S BEEN THE MOST IMPORTANT LAWYER IN THE MOST IMPORTANT I NDUSTRY FOR 30 YEARS. NOW HIS LEGacY IS UNDER scRUTINY as THE TWIN scan DALS OF OPTIOns BacKDATING anD “PRETEXTING” RAISE THE QUESTION: I S HE TOO CLOSE TO THE COMPanIES HE REPRESENTS? BY ROGER PARLOFF “I first remember hearing Larry Sonsini’sname probably in the industry. But he’s more. Sonsini, 65, is an integral part in 1986 or 1987,” says Dave Roux, who co-founded Silver Lake of Silicon Valley’s history and culture. He’s the unflappable, Partners, a private-equity firm in eM nlo Park Calif., focusing low-key business advisor everyone trusts, which is saying a lot on technology investments. in a community of super-smart, hyperaggressive egomaniacs. Back then, when Roux lived on the East Coast, he was at a He’s the behind-the-scenes player to whom the executives at meeting of the board of Lotus Development in Boston, when the most innovative companies of the Digital Age take all their someone suggested they find the “East Coast Larry Sonsini” to toughest business problems. act as their lawyer. Larry Who? Roux asked. “They explained This year, though, Sonsini’s 40th with the Palo Alto firm of to me that he was the Larry Bird of Silicon Valley,” he says. Wilson Sonsini Goodrich & Rosati, he’s found himself shoved “The go-to guy when you need the thing to work. The ice-in- uncomfortably into the spotlight. Some newspaper readers first his-veins, blue-collar, scramble-for-the-ball, great-teammate, learned his name in July, when it appeared in articles about the no-ego, championship-caliber guy.” options-backdating scandal. Many of the implicated companies Twenty years later everybody in the tech business knows were tech firms, and a high percentage of them were his clients. Sonsini. He is the most influential and well-connected lawyer In September his name came up again when he was called be- PHOTOGRAPH BY ALBERT WATSON PrinCe of the valley fore a subcommittee of the U.S. House Energy and Commerce his stomach,” his drive to excel at anything he does. In 1984, Committee to answer questions about Hewlett-Packard’s now when Latta was still a young associate, Sonsini invited him infamous board leak investigation. Rival lawyers and corporate- and another lawyer to fill out a foursome at the nearby Sharon governance watchdogs then piled on, raising questions about Heights golf course. At the time, says Latta, Sonsini preferred whether Sonsini wore too many hats in the Valley, by investing tennis and wasn’t much of a golfer. When Latta arrived, Sonsini in clients and serving on their boards. Maybe he represented and client Ken Oshman—the “O” in telecom-equipment maker so many clients, they argued, that he was risking conflicts of ROLM Computer—were already banging balls on the driving interest. range with strange intensity. Latta then discovered that Sonsini There’s no disputing that Sonsini’s client roster is long. It and Oshman had already played an 18-hole round that morning; could serve as an outline for a history of the digital revolution. he would be joining them for their second round of 18. Then He started out working for semiconductor companies like LSI Latta found out what was going on. “Oshman’s company was Logic, Cypress Semiconductor, and National Semiconductor, being acquired by IBM,” he explains, “and the IBM guys are then moved on to hardware companies like Silicon Graphics, serious golfers. So Oshman and Larry are going to get good at Apple Computer, Sun Microsystems, and Seagate Technolo- golf. Larry’s not going to do something that he isn’t going to be gies, then represented software firms like Novell, WordPerfect, good at. They must have been out there for nine hours.” and Sybase, and finally added Internet pioneers like Netscape, Sonsini was born in Rome, N.Y. When he was 8, his father, a Google, and YouTube. This month Sonsini will complete an- quality-control inspector at Revere Brass & Wire, packed up his other defining deal, the $17.6 billion acquisition of client Fre- family and moved. “Rome wasn’t growing,” says Sonsini, “and escale Semiconductor by private-equity investors—the largest he had an itch.” In Los Angeles, Sonsini’s father found work tech buyout ever. with Hughes Tool Co. and, though he had no college education, This is the story of how a modest securities lawyer became the climbed through the ranks to the No. 2 position. “He instilled in most powerful man in the most crucial sector of the American me a very strong work ethic,” says Sonsini. “It wasn’t important economy. And what it means when a player noted for his probity what you did, but it was important that you do something and and unfailingly good judgment suddenly finds his name being do it well.” linked to some pretty sleazy behavior. Despite his slight build, Sonsini became a quarterback in high school and then, as just a freshman at the University of DRIVEN California at Berkeley, a first-string varsity rugby player on a At an interview in Sonsini’s Palo Alto office in October, his team in contention for the national title. Yet Sonsini gave up discipline and organization are immediately apparent. Papers college athletics in his second year to focus on his studies. “I are arranged in neat, evenly spaced stacks across his desk. The wanted to be a professional,” he says, “and I wasn’t going to be desk is modest in size, with clean, modern lines—no frippery. a professional athlete.” He is dressed elegantly in a dark suit and tie, which stand out in Upon graduating in 1963, Sonsini entered Berkeley’s Boalt Silicon Valley, where business casual was born and still flour- Hall School of Law. During the spring of his first ey ar, in 1964, ishes. At five foot ten and 165 tear gas periodically wafted pounds, Sonsini is fit from over the campus from Sproul morning workouts in his home Hall, for this was the year gym. He weighs slightly less THE rOAD tO aPPLE of the Free Speech Move- than he did in college. ment—the opening bell of the Sonsini speaks calmly in ’60s. But Sonsini was “a pure a confident, voice-of-God 1959 Berkeley freshman observer of it all,” he says. baritone that a network news 1966 Graduates from law “I was so consumed in law anchor would covet. There is school at the university school.” (Though several of no irony, sarcasm, or cynicism of California at his partners today are major evident in him, and he seems Berkeley, becomes first political fundraisers—John guileless in comparison to associate for McCloskey Apple’s Roos for Democrats and Bo- Wilson & Mosher. many East Coast lawyers. ipo ris Feldman for Republicans His sentences end promptly •does his firsti PO for $101 —Sonsini’s own politics are as soon as he has answered a Coherent radiation. largely unknown, even to his question, another uncommon 1978 Firm renamed Wilson sonsini MilliOn partners.) trait in his bill-by-the-hour goodrich & rosati. profession. He is more Gary 1980 Represents apple Computer in SOMETHING Cooper than Cary Grant. UNIQUE What’s concealed is what Other Clients during this era A lready determined to his partner Bob Latta refers Sun Microsystems, Quantum become a business lawyer, to as the “nuclear reactor in Sonsini signed on as a research PrinCe of the valley assistant to professor odrich & Rosati. Richard Jennings, a frosty PalO altO heats uP Though the firm repre- don who had co-authored the sented venture capitalists first casebook on securities 1988 WSGR surpasses all Bay area law firms in and investment bankers from regulation. Though most profitability. time to time, its preference Boalt graduates joined big 1994 novell acquires WordPerfect. Sonsini, who was to represent the start- commercial firms in New had represented both, resigns from Word- ups themselves—a strategy York, Los Angeles, or Perfect’s board and gets not always understood by San Francisco, Jennings waivers permitting him to represent Novell. its younger lawyers. Latta suggested to Sonsini that 1995 netscape iPO starts remembers when he was an he look at a tiny outfit in internet bubble by showing associate in the 1980s be- Palo Alto. “Dick said to me, that a company with no ing in Sonsini’s office one ‘There’s something going on earnings can go public. day when Sonsini took a call down in the Valley. There •Pixar’s $132 million iPO on the speakerphone from are a lot of young businesses •netscape iPO starts internet bubble by Bill Hambrecht and George starting, and they ’re showing that a company with no earnings Quist. Their firm was then companies that are going can go public. the dominant high-technol- to have to go public.’ ” ogy underwriter in San Fran- At that time Santa Clara netsCaPe’s cisco, and they had called to Valley was already home ipo inquire if Wilson Sonsini to a handful of mature Other Clients during this era $140 would agree to become their tech companies, includ- Cypress, sybase, silicon graphics regular outside counsel. “I ing Hewlett-Packard and MilliOn think I literally got out of the Fairchild Semiconduc- chair and started jumping up tor. Hewlett-Packard— and down,” Latta recalls. He launched from a garage and dedicated to innovation—was was gleeful, he explains, because he thought that now he’d serving as an inspiration and paradigm for many young entre- have a shot at making as much money as his classmates who’d preneurs.

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