O’Melveny Says It Will Combine With N.Y. Firm
Los Angeles-based law firm O’Melveny & Myers on Tuesday joined the merger trend sweeping the legal profession, announcing its intention to combine its practice with that of New York-based O’Sullivan, a boutique firm specializing in private equity work.
If approved by partners at both firms, the new practice would have more than 800 lawyers, bolstering its position as one of the largest in the country.
O’Melveny saw profit rise 34% last year on 17% growth in revenue.
The combined firm would have 265 attorneys in New York, almost double the number O’Melveny & Myers now has there, and it would add private equity to its practice areas, which now include litigation, bankruptcy, class actions, intellectual property and transactional work.
“We’ve really identified the private equity practice as a strategic priority for us,” said O’Melveny Vice Chairwoman Patricia Frobes.
“There are very few private equity firms of the caliber of O’Sullivan, so it’s always been at the top of our list,” she said. “It really was not so much looking to merge with another firm, but targeting the private equity area in New York. That led us to O’Sullivan. In the private equity practice, it’s important to have a strong profile and footprint in New York, which O’Sullivan gave us.”
An O’Sullivan representative did not return calls.
The proposed merger is one of at least two dozen announced this year among legal partnerships, which are following a consolidation trend seen in other professional services fields, such as accounting. Over the last two years, large, multi-practice law firms have been growing and diversifying by combining with smaller firms that have one or two specialties. After a record 70 mergers last year, 12 firms now have more than 1,000 lawyers each.
“I think we’re going to see another three or four years of mergers,” said Brad Hildebrandt, chairman of New Jersey-based Hildebrandt International, a professional services consulting firm that specializes in advising law firm mergers and acquisitions. “There’s been a substantial number of mergers of out-of-state firms with small and mid-size New York firms.”
Hildebrandt said O’Melveny’s proposed merger with O’Sullivan follows a pattern of firms seeking to expand their New York presence and their financial practice.
“O’Sullivan is a very good small boutique finance firm in New York--and very high profile with a very good reputation,” he said. “This fills out and expands [O’Melveny’s] New York operation in the corporate finance area, which is exactly what their goal should be. You can’t be too big in New York. This broadens O’Melveny’s reach, and makes it more competitive nationally and internationally.”
