O’Melveny & myers
Credit crunch not to blame for associate exitsThe managing partner of O’Melveny & Myers’ New York office denies that the credit crunch has precipitated the layoffs of up to 15 associates.
O’Melveny tax partner and New York head Brad Okun confirms that a number of associates are leaving, but insists that the exits are all based on individual performance and are a result of O’Melveny’s annual associate appraisal process.
“Every year we re-evaluate our associates and counsel to see how they’re performing,” Okun says. “Every year some fall below our expectations and therefore some are asked to leave. This year is no different from other years.”
However, a source close to the firm says there has been “a downsizing” in New York.
“The firm’s taking the opportunity of not being absolutely flat-out and there being less work around to do a little house-cleaning,” he says.
The associates who are leaving are believed to work in O’Melveny’s private equity, Latin America and general corporate groups. They are thought to have been given until 15 March to depart.
Okun refuses to comment on the details of their departures, but claims that work levels remain high and that the transactional side of O’Melveny’s business has not been affected by the downturn.
“We haven’t seen a real slowdown in private equity yet,” Okun insists. “We still have a bunch of major deals in the hopper, although I anticipate no one will be seeing many of the larger deals for a long time. We have a slew of private equity clients focused on the mid-market, as well as some private equity work for public clients.”
Okun adds that his firm strengthened its restructuring and bankruptcy groups last year, notably with the arrival of five partners from Stroock & Stroock & Lavan led by Mike Sage.
As with most US firms, the start of the new financial year appears to have given O’Melveny a chance for a little internal navel gazing. On 1 February a restructuring of its transactional group will take effect. The firm’s mergers and acquisitions and private equity group (Mape) will be renamed M&A, with the funds formation division spun out as a standalone team.
Corporate partner Greg Gilbert will become global head of the M&A group, while former co-heads Spencer Klein and Mike Kennedy will head East Coast M&A and West Coast M&A respectively. The former group will include O’Melveny’s London M&A team.
Externally, the year-end has also offered the chance to look back on how O’Melveny – in New York at least – has changed in recent years. In 2002 O’Melveny merged with one of New York’s leading private equity shops, O’Sullivan.
“O’Sullivan was a scorched earth place,” remembers one Manhattan recruiter. “It was a very aggressive firm. The traditional O’Melveny was a bit gentler.”
The primary attraction of O’Sullivan to O’Melveny was its standout private equity practice, which included high-profile clients such as Apollo Group and JPMorgan Capital.
At the time of the deal, O’Sullivan chairman John Suydam said his firm had found the right partner in O’Melveny to expand its private equity and litigation strengths.
By 2006 Suydam had left the firm for Apollo, one of the most significant among a string of notable departures over the past two years.
In summer 2006 Akin Gump Strauss Hauer & Feld raided the firm for a five-partner group of funds lawyers that included well-known partner Adam Weinstein. Other exits included Louis Kimmelman, the former co-chair of O’Melveny’s international arbitration practice, who joined Allen & Overy; Latin America specialist Jose Fernandez, who left for Latham & Watkins; and a brace of partners comprising corporate partner Mark Thierfelder and tax specialist Daniel Dunn, who both joined Dechert in 2006.
Last week (www.thelawyer.com, 28 January), Thierfelder and Dunn were joined by the most recent partner departure, corporate specialist Drake Tempest .
“This is maybe not a flood, but is for sure a steady trickle,” says the recruiter.
Paul Hastings’ figures reflect nY-london overlapThe chairman of Paul Hastings has placed London at the core of future growth plans, as the firm prepares to release figures that will show a 20 per cent rise in total revenue for 2007.
Tax partner and firm chairman Seth Zachary says the bond between the US and UK markets was increasingly important to the firm because of the “enormous overlap” between London and New York in terms of Paul Hastings’ client base and practice groups.
“We’re seeing greater and greater symmetry in the two offices, which is why London’s so critical to us,” says Zachary. “There’s an extremely important nexus between London and New York that goes to the heart of Paul Hastings and is a tremendously critical part of our future growth. The only frustration is our need to continue to grow in both offices in what is a very competitive market.”
The key areas of overlap between Paul Hastings’ London and New York practices include finance, capital markets, private equity and funds. Shared clients include General Electric, Citi, JPMorgan Chase, Morgan Stanley, UBS and Lehman Brothers.
Paul Hastings has grown its London office entirely organically from a 10-lawyer outpost five years ago to its current 41 lawyers and seven partners.
“If that rate of growth were to continue London would be our second or third-largest office within five years,” says Zachary.
London and New York are already Paul Hastings’ fastest-growing offices. Last year London billings rose by 38 per cent, while collections were up by 67 per cent. The office generated $32m (£16.08m) in total revenue.
The equivalent figures in New York were 39 per cent and 34 per cent respectively, with a total revenue of $250m (£125.6m). Although the firm had not finalised its 2007 figures last week, Zachary is projecting a firmwide revenue of around $980m (£492.36m).
“If someone had told me five years ago that we’d be disappointed with 38 per cent growth in London I’d have said they were crazy,” adds Zachary. “But we’d like $64m [£32.15m] in London and $400m [£200.96m] in New York.”
Outside the London-New York axis, it is Paul Hastings’ booming Asia network and growing European footprint that have been instrumental in driving the firm’s growth in the two cities. In Asia Paul Hastings has offices in Beijing, Hong Kong, Shanghai and Tokyo and boasts one of the strongest private equity and leveraged finance practices in the region.
Last month the firm opened in Frankfurt after snaring a merger with 27-lawyer independent Smeets Haas Wolff.
The slummers of love
So there we were, having a quiet end-of-January Guinness in our local last night, when we found ourselves spinning back 40 years to the Summer of Love.
This quiet backstreet boozer turned out to be the venue for a charity gig by Mr Mellow Yellow himself, King Hippy Donovan.
But it was to get weirder. The Lawyer‘s hosts for the evening were two of the brightest stars from the London legal market, director of clerking David Barnes and Stuart Catchpole QC from 39 Essex Street.
Let me say straight off that we kept our clothes on and none of us had flowers in our hair; New York is too cold for any of that malarkey.
After the initial shock of seeing one of London’s top construction barristers singing along to Jennifer Juniper had died down, I asked the obvious question: what gives, man?
Posted: 1 February 2008
The perfect storm
Drake Tempest. Let that sink in for a moment. That, ladies and gentlemen, is a name.
But The Tempest (as surely he should be known), who yesterday joined Dechert from O’Melveny & Myers, doesn’t just have a standout name. He also has a pretty… er… stormy history.
The Tempest used to be general counsel of US telecoms giant Qwest. In July 2004 he was on the receiving end of a subpoena filed by the SEC in connection with its investigation into major fraud at the company.
Gale-like, The Tempest railed against the request and, with hurricane-force obstinacy, held out until, ultimately, the SEC backed down. He was never charged and never indicted.
“My name is a combination of surnames,” The Tempest told me yesterday. Apparently Drake was his great, great grandmother’s name, while ‘Tempest’ hails from York – the English one.
Posted: 29 January 2008
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