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Entrepreneur in Residence? That's Al Gidari of Perkins Coie
by Wendy R. Leibowitz

Albert Gidari has a law firm partner's dream job: he bills no hours. Tomorrow he may work four hours or so, after a morning spent sailing in Seattle's Elliot Bay. He is Perkins Coie's new, and first, "entrepreneur in residence."

Of course, there are clouds in paradise. Mr. Gidari has no secretary, and no office--he floats among Perkins' empty conference rooms with a laptop. "I'm a no-overhead lawyer," he says. "Lawyers are knowledge workers. All I need is a laptop and a phone." But he had to explain to the support staff that yes, he could indeed have a telephone extension, even though he has no permanent office. "They didn't understand that I could have a PBX [voicemail box] without a physical phone," he recalls. He has to explain what an "entrepreneur is residence" does, to everyone in the world, including to his partners at the firm. "The title is vague enough to mean many things to many people," Mr. Gidari notes. (He will be providing legal counsel and business guidance, to both start- up and established companies, through a "G-Savvy" department. Confused? Check out www.perkinscoie.com/eir/gsavvy.htm). Finally, Mr. Gidari, who is a full partner in the firm, doesn't get a normal partnership draw: He is paid partly in stock options, acquiring equity in his clients for the firm.

But significant challenges remain. For example, Perkins Coie isn't sure that Mr. Gidari, who until recently had been a traditional partner at the firm, chairing its Internet Law and Electronic Commerce practice group, can be issued a law firm business card. Firms like Perkins Coie can think outside the box, but they remain firmly rooted inside the box. And that box might not be able to fit "entrepreneur in residence" on its business cards. "I'm a beta for this idea," says Mr. Gidari. But others will follow, he believes. Let's not even think about letterhead issues.

How Did You Get Here From There?

Mr. Gidari, a former Marine, worked at Camp LeJeune, North Carolina, as a judge advocate and congressional liaison. "There is no better place to be trained as a trial lawyer than the military," he believes, adding that he handled over 240 trials, mostly criminal law cases. Computer forensics were involved in his first full trial, a rape case where the defendant had falsified computer records to make it appear as if he'd been working at the office when the crime occurred.

Trial work can be humbling--a judge once threw a pen at him in front of the jury, saying, "Sit down!" Because the benefits to senior officers are so generous, Mr. Gidari felt it was important to leave before "the golden handcuffs snapped on." He says he wanted to do more, "become something different. Maybe everyone should change jobs every ten years." When he left after ten years, in 1988, the trial of Oliver North was underway, which captivated the Marines, he recalls. "We were glued to the drama." Mr. Gidari wrote to Colonel North's lawyers, at Sullivan & Cromwell, asking to be hired for the defense team. "I am not a potted plant" is still an important legal motto, he says.

But he also contacted a headhunter in Seattle, because he was interested in Perkins Coie. The firm's branch office in Washington, D.C. rejected him right away, but the main office in Seattle was hiring. His wife, whom he refers to as "the logistics commander for the home base," is originally from Spokane, so the family, which includes two sons who are now 12 and 8 years old, relocated to Seattle in 1988. He still spends about twenty percent of his time in Washington, DC, following technology and telecommunications policy issues.

Perkins Coie in 1988 was the spawning ground, the Tigris and Euphrates, of many Internet businesses. "This place is unique," says Mr. Gidari. The firm grew together with one of its most prominent cyber-clients, Internet retail giant Amazon.com, and now counsels Internet auction site Ebay. Mr. Gidari's clients came to include Netscape Communications Corp., Nintendo of America, Dell Computer Company, Costco Online, Egghead Software, and, perhaps inevitably in Seattle, the Starbucks Coffee Company. "I worked like a dog here for 12 years," he recalls, eventually heading up its Internet law and ecommerce practice group. "I never did boring work at Perkins. I was treated well. Sometimes I felt overpaid."

Yet, feeling restless, he left last year to become chief executive officer of an Internet bank--a bank that would exist only in cyberspace. "It was an opportunity to build an institution, expoit new markets," he sighs. "I wish that every lawyer could step out of the firm, and realize how little we know, how uninformed we really are" about clients, he says. "I would pay a premium for that experience." And pay he did, in a way--the bank never got off the ground, even though they raised six million dollars in three weeks. "The founder developed an acute case of 'founder-itis,'" Mr. Gidari says, referring to the need to share control with major investors and the CEO. On the eve of cutting the checks to launch the bank, the founder refused to sign. Investors' money was returned to them via Federal Express the next day. Mr. Gidari worked out the "entrepreneur in residence" deal with Perkins Coie, and returned to the firm. The experience taught him both about Internet businesses and about Perkins Coie: "This firm has never said 'no' to me," says.

He also taught as an adjunct law professor, from 1996 to 1999, at the University of Washington, where he developed and taught the School's first course on the law of electronic commerce. He assisted in creating the University's Center for Law, Commerce and Technology. But ultimately, he believes in online education, with students choosing the specific courses they need and the faculty members from whom they wish to learn. "Why can't I take Robert Bork's course on the First Amendment if I want to? It cracks me up that you have to study in a concrete bunker that is Washington State law school to be accredited to practice law in this state," says Mr. Gidari. When he took the Washington State bar exam, he adds, "There was not a single question specific to the state of Washington."

As legal education must change, so must law firms. Perkins Coie will evolve to become "a venture firm," believes Mr. Gidari, providing more than legal services to its clients. The firm will share business and litigation risks with clients, partnering on deals where possible. Clients are demanding it, and the current law firm paradigm, based on hourly billing, is not a sustainable model, says Mr. Gidari. "The dinosaur legal firm will be on the trash heap," he says. "You can't have a model based on an ever-increasing hourly fee. You can't measure profits like that forever." Eventually, he says, lawyers will merge with their clients, sharing equity in all profits, not just with Internet-based clients. Personal service is key, as always. Indeed, some law firms in Silicon Valley that currently attempt to provide counsel to start-ups can feel like "financing mills," says Mr. Gidari. "They lose the personal touch. ... Lawyers must think like their clients and act like their clients." In a sense, his relationship with the firm now mirrors that which he provides to his clients. "The firm has invested in me like I'm a start-up," he says.

He'll be in the office perhaps four hours, total, next week, for meetings with two emerging companies. Like most new companies, they need basic human resource guidance, including benefits packages and hiring and firing advice. The founders need help putting together shareholder agreements, understanding the issues, rather than just tapping form documents. They need pointers to service providers, such as technology vendors and software developers, and help in evaluating those service providers. They need to be taught how to read and draft business plans, and to be educated in how to structure their business. "They generally underestimate the portion of their revenue that will be devoted to benefits," says Mr. Gidari. "They'll estimate that maybe ten percent will be salaries and benefits. Too low--they're off by a factor of three."

These clients need a strategic plan to grow responsibly, and they need to get to know their main competitors, and how to keep an eye on them. For Internet companies, this involves following constantly moving targets. "They should have what they need," Mr. Gidari says simply. "If they need ceiling tiles, get them ceiling tiles." Mr. Gidari, who points out that he needs no ceiling tiles to practice law, is akin to The Motley Fool, dispensing both basic and sophisticated advice to his clients. Indeed, The Motley Fool investing site, at www.fool.com, is one of his favorite Web sites. "I love what I do. I'm in Nirvana," he says. Even without a business card.


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