O’Melveny & Myers posted declines among key financial indicators in 2013, with gross revenue at the firm falling 10 percent, to $733.5 million, according to The American Lawyer’s reporting.
The firm’s profits per equity partner fell 16 percent, to $1.73 million, while revenue per lawyer declined a more modest 8.6 percent, to $1 million. The declining numbers for 2013 follow a year in which O’Melveny, as a result of alternative fee arrangement payouts, turned in record revenue per lawyer and profits per equity partner.
“We didn’t expect to achieve the same financial results as 2012 because that year we benefited from large success fees,” says Bradley Butwin, the firm’s New York–based chair.
Twenty percent of the firm’s revenue is generated from success fee structures and other alternative fee arrangements, according to Butwin. “We are big believers that creative alternative fee arrangements demonstrate our commitment to our clients and our willingness to share their risks,” he says. “As a result of this commitment and risk sharing, there will be some years with big success fees, but sometimes it takes time for these deals to pay dividends.”
The firm’s overall attorney head count contracted slightly in 2013, declining 2.3 percent, to 721. The equity and nonequity partnership ranks at O’Melveny also declined, 2.2 percent to 178 and 18.8 percent to 13, respectively.
“Last year was a strong year for O’Melveny both in quantitative and qualitative terms,” says Butwin. “Quantitatively, 2013 was the second most profitable year in our firm’s history.”
To illustrate this, Butwin pointed to some of the firm’s high-profile litigation wins and transactional work, including representing US Airways in labor negotiations and an antitrust challenge that stemmed from its merger with American Airlines. Additionally, the firm secured a win for Top Victory Electronics (Taiwan) Co. Ltd., a leading producer of LCD televisions and computer monitors, in a patent infringement dispute related to digital television technology brought by Hitachi Consumer Electronics Co. Ltd.
In 2013 entertainment industry–related matters also abounded at the firm, which has its historic roots in Los Angeles. O’Melveny represented AEG Live in a trial in which Michael Jackson’s family attempted to hold the arena management and concert promotion company responsible for the musician’s death. The firm also continued its representation of Warner Bros. in connection with the long-running copyright dispute between the entertainment company and heirs to the creators of Superman.
O’Melveny’s capital markets practice advised more than 60 clients in matters that had a combined value in excess of $40 billion, including representing the underwriters in Thermo Fisher Scientific’s $2.53 billion stock offering as well as Yahoo in its first securities offering in a decade.
Last year the firm was involved in more than 250 M&A transactions with a total value just shy of $100 billion, which included representing Dealertrack Technologies in its $1 billion acquisition of Dealer.com and Samsung Electronics Co. Ltd. in its acquisition of NeuroLogica Corp.
O’Melveny made some key acquisitions of its own in 2013, with Cadwalader Wickersham & Taft’s restructuring practice partners John Rapisardi, George Davis and Peter Friedman joining the firm. Additionally, Stuart Sarnoff, former senior managing director of Avenue Capital Group, came aboard the firm’s securities litigation practice as a partner.
“Last year was about getting stronger, and the addition of a world-class restructuring team has been a major part of that strategy,” Butwin says.
This report is part of The Am Law Daily’s early coverage of 2013 financial results of The Am Law 100/200. Final rankings and full results for The Am Law 100 will be published in The American Lawyer’s May 2014 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.