For the second year in a row, O’Melveny & Myers reported a decline in both revenue and profits as the firm struggled with the continuing economic downturn and client pressure on rates. The Los Angeles-based firm reported 2009 gross revenue of $826.6 million, a decline of 8.9 percent. Profits per equity partner were $1.47 million, a decline of 4.2 percent.
Last year “was the most challenging year that I can recall since I’ve been a partner and certainly as my tenure as chair,” says Chairman Arthur B. Culvahouse Jr. The beginning of the year was particularly challenging, Culvahouse says, with a large number of busted deals in the capital markets and private equity practices, and slow collections from clients. O’Melveny’s litigation department, which constitutes 55 percent of the firm’s lawyers and was a Litigation Department of the Year finalist, suffered from client pressure to significantly discount rates and fees. And Culvahouse also pointed to a “somewhat surprising lag” in regulatory enforcement activity from the Obama administration last year, although the firm is starting to see an increase in volume in those matters.
