Spokane intellectual property law firm Lee & Hayes has worldwide reach

Twenty years ago, Spokane attorneys Dan Hayes and Lewis Lee started a virtual two-man patent law firm, hoping to keep themselves in business for maybe five years.

Instead, that company, Lee & Hayes, has become one of the country’s top firms for intellectual property, patents and trademarks. It has more than 150 employees in seven cities, with about half of those in Spokane.

The 20-year evolution demonstrates how smart growth and reliance on modern communications tools can give a small firm big advantages, even when it’s not located in one of the nation’s business centers.

“It was never our dream to create a big law firm,” said Hayes, 55. The two men, both electrical engineers by training, went through law school and met at a previous Spokane firm, Wells St. John. They got a chance to do patent work for Microsoft in 1994 and launched Lee & Hayes as a virtual office in their homes, using email and a data connection system to exchange big files.

The first big tech boom took place over the next decade, with companies filing patents to establish ownership and protect their software, hardware and business practices. By 2000, Lee & Hayes had moved into a downtown office and had a dozen attorneys on staff.

They had two major clients: Silicon Valley-based Hewlett Packard and Microsoft. Over the next several years, as the patent rush increased, they added clients such as Boeing, Amazon, Honeywell and Intel.

Helping them land work was the difficulty big companies like Microsoft had in finding enough patent attorneys in their own backyards. The result, Hayes said, was the big firms began hiring other firms to do that work.

“When we started with Microsoft we used to fly over there for every meeting about an invention,” Hayes said. Soon the information could be exchanged by phone or videoconferences or by email.

Hayes helped develop the law firm’s electronic database to keep track of all its cases and manage schedules.

“Those companies would become bureaucratic as they got large, and sometimes they’d find themselves losing track of key deadlines. We kept on top of things and made sure they didn’t need to nag us on projects. We were low-maintenance,” he said.

The firm began looking to Asian markets in 2001 and opened a Seattle office.

Even the Great Recession couldn’t slow patent and intellectual property work, said Lee, 49.

“Some law firms saw their work come to a screeching halt,” he said, “but that didn’t really slow down (patent work), because there were many companies that were trying to innovate out of the crisis.”

Plan to add attorneys

During the past dozen years the firm has opened offices in Washington, D.C.; Atlanta; Rochester, New York; Austin, Texas; and Portland.

Its plans for growth include adding a dozen attorneys this year, with five of those in the Spokane office, and potential new offices in San Francisco and Hong Kong.

Lee said it’s been easy to keep Spokane as the center of the network. Leasing office space here is far cheaper than in bigger cities. And because patent work is regulated by federal rules rather than a patchwork of state laws, the dispersed team of staff and attorneys easily shares ideas and develops projects online, he said.

Among Lee & Hayes’ newer customers are Alibaba, China’s largest e-commerce company, and Geely, a fast-growing Chinese-based auto manufacturer.

Most of the firm’s intellectual property work is for clients outside Eastern Washington, but Lee & Hayes has some local clients, such as Next IT, Pearson Packaging, Telect and others.

Greg Tenold, president of Spokane Valley-based Spokane Industries, has been using Lee & Hayes for several years to protect his manufacturing company’s patents, including one for high-end wine fermentation containers and for its ceramic-lined rock-crushing equipment.

“Lee & Hayes is the top firm in their field,” said Tenold. “They’re a world-class firm, and we wanted to be associated with them, as they helped us establish the value of our intellectual property.”

‘Still in the first inning’

At the 20-year mark, Lee & Hayes needs to look to its succession plan so that the firm endures another 20 years, said firm CEO Shaun Cross.

When he came on board in 2008 he found the firm relied heavily on its Microsoft work and on Lee to carry forward new initiatives. Cross and the partners developed a strategic plan to add more services and clients.

Three years ago Lee & Hayes shook things up by adding litigation to its practice areas. It now has a stable of attorneys who help companies defend their patents, copyrights and trademarks in court.

It also added corporate consulting services, and expanded into medical fields. One of its clients is the Fred Hutchinson Cancer Research Center in Seattle.

Like Hayes, Lee wasn’t looking to build a global law firm when the two started. But the growth of the firm became an economic necessity in maintaining the advantages Lee & Hayes had established.

“One of the most meaningful times in our history was when Dan and I realized, one day, that we were closer to being an institution than a small firm,” Lee said.

“We now had a responsibility because we were a firm that was creating meaningful jobs for people. That got us thinking about the future. How would we keep this thing going?”

Lee said the company’s hiring practices are deliberate and exhaustive; a three-page outline of what they’re looking for in candidates can be boiled down to the “no jerk rule.” That means applicants who show excessive ego, a sense of entitlement or excessive vanity are weeded out, he said.

Said Cross: “A lot of law firms have caustic attorneys. They may be used to behaving badly sometimes. If we see any of that trait, we won’t tolerate it.”

Those workers are the reason Lee & Hayes has been named by an industry magazine as the best overall intellectual property law firm in the country for each of the past four years, Lee added.

Just as important, Lee said, was the firm being a finalist in the Washington’s Best Workplaces awards chosen by the Puget Sound Business Journal.

There’s more to come, Lee added. “I do believe we’re still like a startup. I consider Lee & Hayes is still in the first inning of what it can become.”