February 17, 2012 4:50 PM
The Am Law 100, the Early Numbers: At O'Melveny, Profits Rise as Revenue Remains Flat
Posted by Drew Combs
O'Melveny & Myers saw its profits per equity partner and revenue per lawyer rise to record levels in 2011, according to The American Lawyer's reporting.
While O'Melveny's gross revenue essentially remained flat by declining less than 1 percent to $779 million, profits per partner jumped 13.1 percent to $1.73 million, and revenue per lawyer rose 10.2 percent to $1.02 million—the first time the firm has broken the $1 million mark in revenue per lawyer.
Recently installed chair Bradley Butwin says the strong financial performance was the product of rising demand for litigation and transactional work, improved efficiency in handling alternative fee arrangements, and a surge in billed hours among firm lawyers. Says Butwin: "This was a business-driven increase in profits per partner and revenue per lawyer."
The increased demand for litigation services came via both major clients like Bank of America Corp.—which O'Melveny represents in successor-liability claims stemming from the acquisition of mortgage lender Countrywide Financial Corp.—and relationships that don't usually require a courtroom appearance. Falling under the latter heading: the firm's work on behalf of the Hollywood Foreign Press Association, whose contract and intellectual property dispute with Dick Clark Productions was recently the subject of a two-week bench trial.
Butwin notes that fixed-fee engagements such as O'Melveny's work for Bank of America have become more lucrative as the firm has improved its ability to monitor and manage the time and effort spent on such matters. "We are able to track how we are doing on a fixed-fee arrangement on a day-to-day basis and no longer need to get prebills to measure activity," he says.
On the transactional side, O'Melveny relied heavily on its entertainment, sports, and media practice last year, as well as on its Asia-focused capital markets group. O'Melveny advised the International Olympic Committee on its decision to award NBC Universal the broadcast rights to Olympic Games from 2014 through 2020 for $4.38 billion. The firm also advised Dreamworks Animation SKG, Inc., in a video-on-demand output deal with Netflix, Inc., and China Eastern Airlines and Asia Cement (China) Holdings Corp. in bond offerings.
O'Melveny witnessed the departures of dozens of attorneys last year, with some partners—including several New York–based private equity partners—defecting to rival firms and others taking in-house or government jobs.
(The somewhat tumultuous year—which included the lateral losses and Butwin's election to replace Arthur "A.B." Culvahouse as chairman—was the subject of a December feature, A Fresh Start, in sibling publication The American Lawyer.)
As for 2012, Butwin says he expects the firm to bolster its recruiting efforts in an effort to meet growing demand. "The best part of our 2011 results is what it means for 2012," he says. "Our litigation practice shows no sign of losing steam and is actually picking up. We may have a trial a month . . . this year."
This report is part of The Am Law Daily's early coverage of 2011 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 2012 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue. An interactive chart of the financial results reported so far is available here. The chart will updated as additional data is reported.Make a comment