SAN FRANCISCO – There’s an undeniable electricity that starts to charge and spark between partners Stephen M. Osborn and Richard G. J. McDerby when they sit down together to talk about the corporate boutique they founded in the summer of 2012.
They have good reason to be excited: Though their partnership has yet to reach its second anniversary, Osborn McDerby LLP is in the early stages of what looks to be a remarkable growth spurt.
The firm exceeded its own projections by 40 percent last year and is already able to be selective about the work it takes on – no small feat for a three-attorney shop doing corporate work in the ultra-competitive Bay Area legal market, at a time when many in the legal community are complaining about a stagnating demand for services.
“You hear some big law firm folks talk about there being flat demand, and Steve and I hear that and look at each other and go, ‘there are endless opportunities.’ We know we’re leaving stuff on the table,” McDerby said.
Able to leverage a wealth of combined M&A experience, the firm has been hard at work establishing its reputation as a sophisticated shop able to handle deals on the buy and sell-side.
Last year, Osborn McDerby was selected over a pool of competing firms to advise mobile app developer Duff Research LLC in its sale to eBay Inc.’s PayPal division. More recently, the firm advised medical technology developer Varian Medical Systems Inc. in an asset acquisition from Velocity Medical Solutions LLC in March.
Their success isn’t derived from some kind of law firm alchemy, but rather a dogged focus on highly personalized, long-term client service and a general, innate passion for entrepreneurship.
“There’s no secret sauce here. This is just lawyers who love business helping businesspeople,” Osborn said.
When Osborn and McDerby first got acquainted through Provisors, a professional networking group, they quickly realized that there were some key similarities in their backgrounds: Both had upbringings as corporate attorneys at multinational firms, but were at the time working to grow their own independent practices.
After a two-year stint working in the commercial litigation at practice Brobeck, Phleger & Harrison LLP and later Morgan, Lewis & Bockius LLP, Osborn moved to Baker & McKenzie’s corporate department as an associate in October 2003 where he practiced mergers and acquisitions and securities law. At Baker, he had the opportunity to live in Hong Kong and later in London where he helped to take companies public in various emerging markets overseas.
In 2009, Osborn, a San Francisco native, came back to the states and soon jumped in-house to take on a general counsel position at CoreMD Inc., a medical technology developer.
“I really got on the ground floor of helping a business team think about things strategically – not just legal strategy, but also business strategy. That’s the genesis of what we’re trying to do here,” Osborn said.
A year later, Osborn made the decision to start fresh, and struck out again to found a firm of his own from the ground up, building up a book of business one client at a time.
It’s a scenario that McDerby knew well. A native Canadian, McDerby practiced public securities law for four years at Fraser Milner Casgrain LLP before moving to a larger platform at Blake, Cassels & Graydon LLP, where he was able to handle a broader swath of private M&A and financing work.
McDerby moved to the Bay Area for family reasons in early 2008 and became licensed to practice in California shortly thereafter – a tumultuous time for the economy and the legal market.
“I looked around and saw that guys my vintage were just being jettisoned unceremoniously from all of these law firms and I said, no one is going to bring me on as they’re jettisoning this guy. I had to figure out what the opportunities were,” McDerby said.
After quickly realizing that a partnership between them could grow larger than the sum of its parts, the two decided to take on a test case, and collaborated on a financing deal.
“It was great. Our client was happy with the outcome and we were happy with how we worked together, so that kind of sealed it for us,” McDerby said.
The firm’s book of business has been swelling ever since, thanks in large part to the lessons each partner learned while cultivating their respective solo practices “A lot of people who leave a big law firm and go start their own thing, they bring a couple of clients with them, maybe even clients that somebody else had developed,” Osborn said. “Rich and I didn’t have that benefit, so we built our clients one by one, and that’s a very personal experience. And we take the building of a relationship with our clients very seriously because it was very personal from the beginning.”
Forming long-term relationships remains a central precept of the firm’s approach to winning and retaining new business.
“I remember when I met Steve for the first time. He told me about the vision of building a network of clients who want to come back, and I think to this day, five years later, he’s holding true to that,” said Jens Horstmann, a managing partner at Crestlight Venture Productions LLC, a venture capital fund the firm represents.
Currently, the firm’s practice consists of about 65 percent M&A work, 20 percent venture capital work – both on the company and the fund side – with the remaining 15 percent running the gamut of other legal and business issues, the attorneys said.
It’s a strategy that plays directly to their strengths and backgrounds. Currently, technology companies make up about 70 percent of Osborn’s clients, while McDerby draws more on his experience in consumer products and manufacturing. In addition to technology startups, the firm counts companies like specialty food maker Eatrue Inc. and the coffee shop operator Prima Cosa Caffe among its clients.
Just over a year ago, the partners brought on Nioura Foad Ghazni, their first associate. Ghazni, who has both a law degree and an MBA, said she was immediately drawn to Osborn and McDerby’s concerted commitment to building long-standing relationships with both clients and colleagues.
The kind of direct, hands-on, client-facing experience she’s getting here is often in scant supply outside of a boutique practice, the attorney said.
“I’m actually speaking to clients and drafting documents,” she said. “There’s a lot more responsibility and a lot more exposure. It’s hard not to be involved because it’s such a close-knit group.”
Looking to the future, the partners said they see the firm as a 10 to 15-lawyer outfit over the next five years as they seek out other attorneys with kindred passion for the work they’re doing and the way their doing it.
But the growth will be deliberate, they said, taking a moment to reflect on how far they’ve come in such a short span of time.
“For both Rich and I, this is the happiest we’ve ever been as lawyers because what we do is really fun every day,” Osborn said.
“This whole ecosystem just makes me happy.”