As winter prepares to take hold in North America, national labor and employment firm Littler Mendelson is setting its sights on warmer climes.
The San Francisco–based Am Law 100 firm, which has roughly 1,000 lawyers in the United States, announced Monday that it will absorb 22-lawyer Puerto Rican firm Schuster Aguilo into its Littler Global network as of Jan. 1. The move marks the firm’s latest effort to expand its presence in Latin America.
The Am Law Daily reported in October that Littler had embraced the Swiss verein structure, under which member firms maintain separate profit pools, for its growing global network while adding firms in Colombia and Costa Rica. The shift came in the wake of Littler’s earlier moves into Venezuela in 2010 and Mexico in 2011.
Thomas Bender, Littler’s Philadelphia-based copresident and managing director, says the “beauty of the verein” structure has allowed his firm to establish a closer relationship with firms throughout Latin America as it aims to boost its ability to serve a multinational client base.
“Clients are looking to reduce the number of lawyers they use,” says Jeremy Roth, Littler’s other copresident and managing director. The firm’s “two-pronged” expansion strategy is to better serve its current clients and develop a “regional solution” for large companies seeking to tap into a single network for their labor and employment needs in the region, Roth says.
A U.S. commonwealth, Puerto Rico has long been home to numerous companies in the retail and hospitality and pharmaceutical industries. More recently, the Caribbean island has become a hotbed for financial services firms seeking certain tax breaks. Bender says Littler represents companies in all three sectors, noting that while Puerto Rico’s local court proceedings are conducted in Spanish, the island’s federal courts use English.
Littler has a long-standing relationship with many of the lawyers at San Juan–based Schuster Aguilo, and Bender and Roth say the firm’s addition to Littler Global will help create what they hope will be a “seamless” client platform in Latin America.
While many of Latin America’s economies are growing, Roth and Bender acknowledge that they still remain small when compared to those in the world’s more developed nations. The key for Littler has been not to incur additional “brick-and-mortar” costs by opening its own outposts in those regions, Bender says, or even to tap into the local revenues of its affiliated firms—a potential violation of the Swiss verein structure.
Instead, Littler is keen on building a leading labor and employment brand it hopes more multinational U.S. companies will tap for assignments inside and outside the country due to the firm’s expanded operations in Central America. “This is a minimal risk, low-reward operation,” Bender adds.
Littler’s international expansion efforts led it to formally withdraw from global employment law alliance Ius Laboris on Jan. 1, 2013. The firm had replaced Seyfarth Shaw in 2008 as the alliance’s main U.S. component, according to our previous reports, and this summer Ius Laboris tapped a replacement for Littler in Ford Harrison.
Bender and Roth both cite Washington, D.C.–based Littler partner Peter Susser, who serves as the firm’s global practice leader, as a key cog in its global push. Asked whether Littler is looking at expansion into other regions, Roth says Latin America remains the firm’s primary focus, although he notes that Western Europe is home to many labor and employment boutiques that could make ideal partners once economic conditions on the continent improve.
Littler has bolstered own bottom line while moving beyond its California base over the past two decades. In 2012 Littler saw its gross revenue rise 6.6 percent, to $455 million, while its profits per partner rose 2 percent, to $500,000, according to The American Lawyer’s most recent Am Law 100 financial data.
Global growth hasn’t been Littler’s sole focus in recent years. Like many of its fellow labor and employment firms, Littler has been bulking up domestically as well, acquiring 46-lawyer Cleveland firm Duvin, Cahn & Hutton in early 2007 and 16-lawyer Memphis shop Kiesewetter Wise Kaplan Prather in 2012, according to our previous reports.
The Am Law Daily reported last month that 2013 had seen a record number of law firm mergers, and the combinations haven’t stopped coming.
In early December, Washington, D.C.–based financial services firms Silver, Freedman & Taff and Elias, Matz, Tiernan & Herrick announced plans to merge as of Jan. 1, according to sibling publication The Blog of Legal Times. British firm DAC Beachcroft also announced a merger to become effective on that same date with Colombian insurance shop De La Torre y Monroy in Bogota.
On Monday, the Houston Business Journal reported that local firms Roberts Markel Weinberg and Butler Hailey have also announced plans to form a 31-lawyer combined firm on Jan. 1. Meanwhile, British firm Pinsent Masons has acquired Ichay & Mullenex Avocats, a telecommunications law boutique in Paris, according to U.K. publication Legal Week. (Pinsent Masons merged with leading Scottish firm McGrigors last year.)
In South Africa, where the nation is mourning the loss of former lawyer and leader Nelson Mandela, leading local firm ENS has continued its African expansion efforts by acquiring De Comarmond & Koenig, the oldest firm on the nearby Indian Ocean island nation of Mauritius. Last month global accounting firm PricewaterhouseCoopers issued an annual report stating that pricing pressures and a push to cut costs would force many firms in northern England to pursue mergers. Since then, at least eight regional firms have announced plans to combine operations.
And though separate merger talks between Am Law 100 firms Orrick, Herrington & Sutcliffe and Pillsbury Winthrop Shaw Pittman and Dentons and McKenna Long & Aldridge recently broke off, leaders from Patton Boggs and Locke Lord have said publicly that both firms continue to hold preliminary discussions on a potential combination. Sibling publication the New York Law Journal reported last week that Patton Boggs has also been in tie-up talks with several Manhattan firms in the 100-lawyer range.