A Conversation With Stroock Alum John Somorjai
We recently sat down to talk with Stroock Alum, John Somorjai. John reflects on his time as an attorney with Stroock, and how it prepared him for a fulfilling career in corporate development. Leading a large team for the evaluation, deal execution and integration of mergers and acquisitions as well as Salesforce Ventures, John is at the forefront of multiple acquisitions and investments, resulting in significant growth for Salesforce.
Q: What did you enjoy most about working at Stroock?
JS: I spent 1993 through 1995 in Stroock’s LA office. This was truly a foundational time in my career, allowing me to develop critical skills around running the M&A process from start to finish. As you may know, acquisitions are complicated transactions. At Stroock, you really learn how to do it right—understanding the sequencing of all the difficult tasks to be done, the many negotiations, and the deep due diligence. It’s truly a methodical process that runs from negotiating the term sheet all the way through closing, including the complex regulatory requirements that need to be resolved. At Stroock, you hone the skills surrounding how to negotiate a deal while understanding the key things that are most important for a client. Sometimes that involves knowing what you are willing to give up to make it come together successfully. Another important skill is learning how to communicate with business executives and board members across an entire transaction. All of this launched my career. Stroock prepared me so well to support in-house M&A work and I left the firm to join Oracle, as in-house M&A corporate counsel. That move ultimately led me to the business side of the corporate world into the corporate development department. I have such positive feelings for Stroock, all I learned there, the people who mentored me and the time I spent at the firm.
Q: Did your experience at Stroock affect how you run your legal teams now?
JS: Absolutely! I am very sympathetic to what our external counsel needs to go through to get the transactions done. I really take the role of partnering with them seriously so that we have successful outcomes. My understanding of their limitations and what goes into completing these difficult tasks is so informative. It helps me manage the whole process for my team in a productive way. And that is critical to our success.
Shifting gears for a second, I want to share that I came into Salesforce to start the corporate development department in 2005 after the company went public. We had never made an acquisition before, and I was charged with building that team from the ground up. It took a long while, but today, the company has over 200 people working on M&A full time with a strong, core competency in this complex area in both deal execution and integration. We have acquired 83 companies and 25% of our employees and many of our leaders came from those acquisitions. It is a real core competency of what we do and it’s all because we have well-trained professionals who really know how to make a successful acquisition, but also know how to integrate it well.
Q: What were challenges you encountered at Salesforce that Stroock prepared you for?
JS: I would say that the hardest part of working in a company is that there are many cross-functional roles where people don’t report to you. My team works across 14 different departments, and I need to build consistent expertise across all of them so that we create a repeatable process. We want to complete serial acquisitions and so we had to develop playbooks for every single department and build up expertise. This took a lot of time, but we are now able to execute 8-10 acquisitions a year, which is super critical to the growth of the company.
Q: Tell us about yourself. Are you a lifetime Californian?
JS: Almost. I spent four fun years in New England studying at Dartmouth and I had a few summer internships in Washington, DC, but otherwise, I have lived in California my whole life. I have been married for 27 years and have 2 children. I am based in San Francisco and live nearby the city.
Q: What is your favorite Bay Area quirk?
JS: One of the really cool things about working in the Bay Area is that Salesforce leases the tallest building in San Francisco, named Salesforce Tower. The top part of the building is above the fog line and the view is quite unique when the fog rolls in. You are above the fog, looking down at the top of the TransAmerica building and Golden Gate Bridge. It is spectacular.
Q: What’s next for M&A?
JS: Since the market is volatile now and there is so much economic uncertainty, M&A is challenging for everyone. I know acquisitions will continue because it is a necessary component of any company’s growth strategy. Every company must develop an ability to successfully acquire other companies and make the integrations work. It’s not always easy; in fact, across all the deal work I have done, I can clearly see the importance of the “people dynamics” in any transaction. It makes such a difference if you pay attention to the human elements.
Just a quick shift into something we didn’t touch on that I want to share as we are active investors. We launched Salesforce Ventures in 2009, to build an ecosystem of enterprise cloud software companies around Salesforce, integrating with our technologies and building on our platform. Today, we are one of the most active corporate investors in the world, with $5 billion under management, 420 active companies in our portfolio and have had 32 IPOs. This has been another impactful part of the work that my team does for the company.
Q: How do you seek new investment opportunities? Is the trend in ESG important to you at Salesforce?
JS: It is important to us, and sustainability is a core value. We are investing in companies with technologies that are focused on important issues like climate change, diversity and inclusion, bringing people out of poverty and workforce skills development. We also emphasize ensuring that our companies align with our values — embedding philanthropy, equality, and social responsibility within our investment evaluation process. We want our portfolio to perform well in the market while helping create a more resilient and inclusive economy.
Q: What is your advice to young attorneys looking to move into the business side of a company?
JS: Stroock does an amazing job preparing young lawyers for working on the business side of a company. There are a few additional things young attorneys should do:
- Get accounting experience. Everyone needs to understand the basics of accounting—usually through formal schooling. Accounting knowledge will be so useful in all they do and was critical to my success.
- Understand financial modeling. Often this is something you learn as you go, but it can be hard to pick up. It is important to model out potential acquisition scenarios to understand the impacts of a particular deal and what is required for a deal to make financial sense.
- Develop a strategic mindset that focuses on looking for opportunities in an acquisition instead of just obsessing on the risks. This can be hard for some lawyers as they are trained to only see the risks rather than looking for growth opportunities.