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Marriage discussions between Brobeck, Phleger & Harrison and Washington, D.C.’s Hogan & Hartson have broken off — but the firm may still have a willing suitor. Philadelphia-based Morgan, Lewis & Bockius appears to have taken Hogan & Hartson’s place in the Brobeck courting ritual. While both firms declined to comment on whether they were negotiating a merger, an industry insider close to the firms said it was a “fair characterization” to say they are in initial discussions. Perhaps coincidentally, Morgan, Lewis Chairman Francis Milone was in San Francisco on Wednesday, his secretary said, and unavailable for comment. “Our policy is that we don’t comment on rumors,” a Morgan, Lewis spokesperson said. And the official line at Brobeck was much the same: “Obviously I’m not commenting,” said Douglas Olson, a partner in Brobeck’s San Diego office and a member of the firm’s policy committee. “Our policy is not to say anything.” While firm leaders are mum, word of an imminent merger has filtered down through the ranks. “My sense is it’s happening,” one Brobeck partner said. “There’s no definitive information. Since Hogan & Hartson [discussions] leaked out, the policy committee has gotten more tight-lipped.” But the partner said he thought Brobeck was at the same point in discussions with Morgan, Lewis that it was with Hogan & Hartson a month ago. The two firms are similar in profitability and practice areas. Last year the 1,053-attorney Morgan, Lewis had gross revenue of $574.5 million and profits per partner of $740,000. By comparison, Brobeck had gross revenue of $470 million and profits per partner of $660,000, a huge drop from the previous year when profits per partner topped $1 million. A full-service firm, Morgan, Lewis’s biggest practice areas are business and finance, litigation, intellectual property and labor and employment. The firm’s nine domestic offices are concentrated on the East Coast, with the exception of its 62-attorney Los Angeles outpost, which opened in 1976. Morgan, Lewis also has international offices in Brussels, Frankfurt, London and Tokyo. Former Brobeck partners said Morgan, Lewis has been looking for a West Coast partner for a long time, and whereas in the past Brobeck was out of its range, the firm’s current economics have made it accessible. “None of the top firms would consider Brobeck,” a former partner said. “Of the realistic options, Morgan, Lewis is probably better than many but not as good as some.” Another former partner said Brobeck’s San Diego office might be reluctant to hook up with Morgan, Lewis. “The San Diego office is the most profitable, way above Morgan’s profitability,” he said. Brobeck partners “won’t be paid for their profitability at a firm like that. � To me that’s the Achilles heel of the deal.” A third former partner said that if a deal is inked with Morgan, Lewis, Brobeck would essentially be acquired. “It’s not going to be Brobeck Morgan Lewis,” he said. “They’d be lucky enough to get a name on [the merged firm], and that probably won’t happen.” However, legal consultant Peter Zeughauser said a union between Brobeck and Morgan, Lewis would benefit both firms. “Brobeck has a fabulous litigation practice left and the same with its corporate practice,” Zeughauser said. “For any firm that would want to come to the West Coast, and the Bay Area in particular and be an immediate player, Brobeck would be a fabulous way to do that.” He said Morgan, Lewis offers Brobeck complementary corporate and litigation practices and a strong presence on the East Coast. A merger “would catapult Brobeck into a national practice unlike anything they’ve had previously,” Zeughauser said, “not to mention providing a vehicle to deal with their debt.” But it’s uncertain whether the two firms will be able to hammer out a deal. Hogan & Hartson’s discussions reportedly were far along before they collapsed, allegedly over client conflicts. “I’ve never confirmed or denied we were speaking with Brobeck,” said Hogan Chairman J. Warren Gorrell Jr. “Without commenting on the premise, there’s no way Hogan and Brobeck could ever merge because we have longstanding conflicts that would preclude that.” Lawyers outside the two firms, however, speculated that Brobeck’s debt load and lease obligations also might have scared Hogan away. “I’ve heard the spin that [the deal breaker] is conflicts,” a former Brobeck partner said. “I believe that is a face-saving explanation. I think Hogan & Hartson walked away because it didn’t want to deal with the issues — the cultural morass and economic issues, that is the real estate.” “My guess is that Hogan got in and saw the balance sheet and said ‘sorry guys,’” said a senior partner at one top Bay Area firm. “You could see a 200-lawyer firm with a big lease problem, but Brobeck has a 1,000-lawyer lease problem.” The partner indicated that the firm is likely to continue shrinking in size. “My take is that [Brobeck Chairman] Dick Odom is desperately trying to make something happen so partners don’t fly in all different directions,” he said. “You could talk to any firm and hear how many Brobeck lawyers are looking. Whole offices are on the market.” Several former and current Brobeck partners say the firm needs to merge in order to bolster its ranks and help it manage its debt and lease obligations. Two years ago, the firm had more than 900 attorneys and now has 500 to 600. In the past year the firm trimmed 171 associates from its ranks through a voluntary buyout program and two rounds of layoffs. And since January, the firm has been hit with a growing number of partner defections — at least 50 partners have left the firm this year. Partners within Brobeck also are concerned about the firm’s future. A current partner said he has asked firm leaders whether a merger is necessary and what would happen to the firm if it didn’t enter a marriage. “I’ve not been able to get a straight answer,” the partner said. “There is a circle of a few who understand the breadth and depth of what is going on, and they’re not always forthcoming with the partnership about what’s going on. I don’t know if it’s because of the press or that they don’t want to freak people out and have them head for the exits.”

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