That was my initial thought, too, although I was thinking more like 80k. At that rate you could attract idealistic, smart lawyers. At 35k you're attracting desperate lawyers.
Also, the place to setup shop would be SF proper. That is where the customers are, and for any business, especially one like this, customers are most important. That said, from what I've read the trolls do a lot of business out of East Texas, so that would make sense too.
The interesting thing about this business is that it's intended to be a stopgap measure until the law changes. That is, if it is very successful it will go away. Also, to avoid becoming the enemy (from what I've read IV sells "patent insurance" - basically protection money against IV) I'd make it as transparent as allowed by statute, and a non-profit.
Much of your value add is going to be in streamlining the process: developing tools and processes to minimize the time it takes to handle a particular suit, and aggregating knowledge about particular patents and particular trolls to amortize the cost of dealing with them over multiple clients. At the end of the day you need a licensed lawyer to sign off on any filings, but everything else can be automated.
- clients are all over, not just SF. Like I said all it takes is just a simple online store for the trolls to come after you, i.e. it's not just software developers getting sued. It's also their clients.
- don't hold your breath about the law changing. The goal here should really be invalidating software patents lock, stock, and barrel - that's not something likely to happen anytime soon.
- the non-profit idea is a good one. If enough companies contributed 1% of revenue/profit/funds raised to an effort like this one, it could probably get going... I personally wish I had the time to organize something like this.
I think you're overestimating how much companies spend on patent litigation. People have been throwing around the number $100 million for how much Apple spent on patent litigation in 2011. That's 0.1% of their 2011 revenues. At a typical Fortune 1000-ish company, total spending on outside counsel (which includes not just litigation, but transactional advice, tax advice, etc) is on the order of 0.2% of revenues.
I think you still need changes in the law to make it easier to distinguish meritorious from unmeritorious litigation. Getting rid of things like the presumption of validity, raising the bar for novelty and obviousness, etc, would all make it easier to handle each case cheaply.