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Lawyer to the Stars, All the Stars

Sep
18
2003

No one in Silicon Valley will be surprised to hear that Larry Sonsini got offered the interim chairmanship of the New York Stock Exchange.
Nor will they be surprised to hear that he declined the offer.
Sonsini, Silicon Valley’s cashmere-clad adult supervisor, is not a front office guy like former NYSE CEO Dick Grasso. No, Sonsini is your classic man behind the scene, poised, smooth, and discrete. This is a man who can manage big egos and strong wills in part because he’s got one of each, healthy enough to match any of his famous friends, some of whom are also clients. They include Sun Microsystems CEO Scott McNealy, Pixar and Apple CEO Steve Jobs, and, of course, former Credit Suisse banker, Frank Quattrone.
That’s one reason Sonsini got tapped for the NYSE job; he’s good at managing these sorts of out-sized egos and the NYSE board has more than its share. The NYSE board is also in a lot of hot water, the kind of hot water that lawyers are good at cooling. Its members are up in arms over a host of management issues, including fees and other pricing issues, regulators are steaming over some of those same management issues, and the board itself is facing competition from the NASDAQ, the place where most Sonsini clients sell their stock. The NYSE needs a diplomat to get it out of trouble. Fast. Sonsini might have been just the guy.
But there’s one little drawback, one the board probably saw as an asset. Despite his membership on the NYSE’s board of directors, Sonsini is part and parcel part of Silicon Valley’s ‘friends and family’ culture; a man who uses his status as part of the valley’s inner circle of movers and shakers to enrich himself and his clients. What would be conflicts of interest in the rest of the world are not seen as problems in Silicon Valley where a delicately balanced money-making machine has been quietly operating for years. This isn’t to say that Sonsini is corrupt, no more than it is to say that all of Silicon Valley’s business practices are illegal. Irregular, yes. And under pressure to change.
Like the NYSE board, the valley is having to adjust the way it does business. It’s not a coincidence that CalPers, the state’s pension agency is calling for Dick Grasso’s head and forcing Silicon Valley venture firms to open their books. The financial world has welcomed individual investors money; it’s only getting used to the idea of giving them an actual say in how they conduct their affairs.
Sonsini is used to working in an insular and insulated environment — what the NYSE needs to get away from, not what it needs to embrace. And if that’s why he turned down the job — and chances are good that it is — it’s a good example of the smart, calculated and cool-headed counsel he’s been giving in California all these years.

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