Larry Sonsini (search), the California lawyer who became a legend in Silicon Valley during the late 1990s market boom, declined an offer Wednesday to run the New York Stock Exchange (search) on an interim basis following the sudden resignation of Richard Grasso (search), a person familiar with the situation said.

NYSE board members had called together an emergency meeting on Wednesday to discuss whether Grasso should resign because of growing public controversy over his $140 million compensation package.

The board met a second time Wednesday evening to discuss who would become interim chairman and CEO. Sonsini, a board member, was offered the position but turned it down, the source said.

In more than 30 years as a business lawyer in the high-tech region near San Francisco, Sonsini has established a reputation as a deal-maker whose clients have included some of the world's best-known technology companies such as Hewlett-Packard Co. (HWP), Apple Computer Inc. (AAPL) and Sun Microsystems Inc. (SUNW)

Sonsini had powerful supporters. Steve Westly, California's state controller and a former top executive of online auctioneer eBay Inc. (EBAY), who had joined the chorus of government executives calling for Grasso's resignation, was full of praise for Sonsini.

"I cannot think of anyone who would be stronger than Larry Sonsini (as a candidate)," Westly said in a conference call with reporters. "You are looking for someone who is above reproach. I think Larry Sonsini fits that bill."

Others praised his skills in consensus building.

"He has a tremendous ability to bring together people with very different views. He's great at getting people in a room and getting them to see what they have in common and how to move forward," said lawyer Hank Barry, a partner at Hummer Winblad Venture Partners.

A director of the NYSE since 2001, Sonsini heads the firm of Wilson, Sonsini, Goodrich and Rosati (search), a powerhouse law firm that has been counsel to scores of tech firms looking to go public.

Through Aug. 31, the law firm, which also has offices in New York, Austin, Texas, and Salt Lake City, Utah, has advised on four stock offerings worth $1.29 billion this year, and assisted in filing plans for three more with a potential value of $511.2 million.

At the height of the dot-com boom, in 2000, the law firm advised on the completion of 100 stock offerings, with a total value of $18.11 billion.

Many of those were underwritten by Credit Suisse First Boston's once high-flying technology banker, Frank Quattrone (search).

Quattrone has pleaded not guilty to federal charges of obstruction of justice related to a probe into how shares in hot public offerings were allocated. If convicted, he faces the possibility of up to 25 years in prison.

Although the collapse of the Internet bubble left critics questioning much of the hype that fed the stock market frenzy, Sonsini emerged above the fray, colleagues said.

"I would say that he is the most respected person, regardless of profession, in Silicon Valley," said Jesse Choper, former dean of the Boalt Hall School of Law at the University of California at Berkeley, where Sonsini has taught securities law since 1985.

"The fact is that there is no one in the whole country who knows the law that governs the exchange better than he does," Choper said.

Sonsini was the legal muscle behind Hewlett-Packard's merger with Compaq Computer, a fractious deal that pitted HP's tenacious Chief Executive Carly Fiorina (search) against Walter Hewlett (search), son of an HP co-founder.

Stuart Francis, vice chairman at Lehman Brothers in Menlo Park, Calif., who has worked with Sonsini on dozens of equity financing deals, said the HP transaction showed Sonsini's experience in corporate governance issues.

"I've always found him to have extremely good judgment, in combination with a strong hand and a willingness to take a stand on things," Francis said.

Sonsini was also instrumental in the early days of legendary Silicon Valley companies like Apple and Netscape Communications.

Those successes were a far cry from his law school days, when, as a student at Boalt Hall, he drove an old VW "bug" to Palo Alto for an interview with the firm that now bears his name.

Sonsini also sits on the board of publicly traded companies Brocade Communications Systems Inc.(BRCD), Echelon Corp. (ELON), Lattice Semiconductor Corp. (LSCC), LSI Logic Corp. (LSI)and Pixar Animation Studios Inc. (PIXR)

With the exception of LSI Logic, those companies all trade on the Nasdaq.