But optimism at the firm is the official line.
The partner departures that seem to be turning into a flow at O’Melveny & Myers continued last week. The most recent exit was the firm’s class action and mass torts head John Beisner, who defected to US rival Skadden Arps Slate Meagher & Flom along with two partners (13 May).
Washington DC-based Beisner, who played a lead role negotiating a multibillion-dollar settlement for Bank of America last year over mortgages issued by Countrywide, took partners Stephen Harburg and Jessica Davidson Miller with him to Skadden.
“O’Melveny has a thriving class actions litigation practice with numerous institutional clients that have close ties to [the firm] and its many nationally recognised class actions practitioners,” a firm spokesman said last week.
Fair enough. But the exit of a big hitter such as Beisner, well-known in the class action community, certainly appears to be a loss for O’Melveny.
And the fact that the departure of the three partners is the latest in an apparent ever-lengthening string of exits at O’Melveny compounds the public perception of a firm facing difficulties.
Earlier this year, IP litigator Dale Cendali left for Kirkland & Ellis along with partners Claudia Ray and Diana Torres, while other recent big-name exits include the former co-chair of international arbitration Louis Kimmelman, who joined Allen & Overy; Latin America specialist Jose Fernandez, who left for Latham & Watkins; and a five-partner group of funds lawyers featuring partner Adam Weinstein, who landed at Akin Gump.
At least in response to its latest loss, O’Melveny has moved quickly. Last Wednesday (13 May) The Lawyer reported that the US firm has selected partner Rich Goetz to replace Beisner as head of the class action and mass tort global practice.
Goetz, now head of the 120-lawyer team, is upbeat about the prospects for the practice group in the US and internationally.
“We’re continuing in the same direction in developing an international practice,” says Goetz. “We have very strong institutional clients and have made some very high-quality hires in recent months. It’s still a very important practice for the firm.”
Goetz’s optimistic attitude is obviously commendable in the face of the high-profile losses his team, and his firm, has suffered.
O’Melveny has had several high- profile departures in recent years. Beisner’s move follows defections in the US and the UK. But the law firm is adamant the exits will not adversely dent the firm’s ambitions.
“We don’t see recent departures as a problem for our firm,” maintains Goetz. “Obviously it’s not a good thing when our partners move on, but it’s not going to be a problem for us.”
Part of the problem is that it is not just the US network that has suffered. In the UK, O’Melveny also lost litigation partner David Kavanagh to Skadden Arps Slate Meagher & Flom in March this year (The Lawyer, 30 March).
Sources suggest that it is a history of underinvestment in its London office by the firm’s Los Angeles hub that has prompted the defection of a number of partners in the UK, such as Stuart Hills, who joined Weil Gotshal & Manges, and Chris Ashworth, who left for Lovells, over the past year or so. But again, Goetz downplays this and insists the City still has a prominent role for the US firm.
“London is certainly still very important to us,” says Goetz. “It’s an office we’ve dedicated a lot of attention to and it’s still an important part of our network.”
It’s not all doom and gloom for O’Melveny. Yes, the firm has been hit by exits, but the line it is sticking to is that the recent lateral hires it has made prove it is able to make it through the downturn in reasonably good shape.
Earlier this year O’Melveny hired Dean Collins, a former director of private equity house Actis, to bulk up its practice in Asia (The Lawyer, 21 January).
O’Melveny also underscored its commitment to Singapore last year when it hired White & Case restructuring partners Bertie Mehigan and Huey Yann Thong to launch the firm’s office.
“It varies across the firm but for me, recruitment is a key priority in our practice group,” says Goetz. “The downturn presents opportunities in litigation and we need to be able to staff cases.”
One of those opportunities came last week when the firm announced its role on the European Commission’s E1.06bn (£950m) record fine against Intel. Partners Riccardo Celli and Christian Riis-Madsen advised Advanced Micro Devices.
So, O’Melveny has proved it can win mandates during the downturn. But the raft of departures offers some indication of the size of the task facing Goetz as he looks to rebuild.