Law firm mergers are on track for a record

Law firms are continuing to merge at a record pace, and the trend is now taking hold among smaller firms, according to a report released last week by legal consulting group Altman Weil.

Twenty-two law firms announced mergers or acquisitions during the first three months of 2014, and 82 percent of those involved firms with 15 or fewer lawyers, according to Altman Weil.

Two of those deals involved D.C. firms. Cohen Milstein Sellers & Toll, a District-based firm with 65 lawyers, announced in February it had absorbed the five-lawyer Florida firm Leopold Law. And D.C.-based Miller Balis & O’Neil, which had 14 attorneys, was acquired by McCarter & English, a Newark-based firm with 400 attorneys.

In 2013, a record 88 law firms announced mergers. Law firms have beenturning to consolidation as the demand for legal services is largely flat. Merging is one way firms can still show growth.

Lobbying for a new model

McDermott Will & Emery, the international law firm with 450 attorneys and staff in Washington, has created a consulting subsidiary focused on health-care lobbying, data analytics and policy analysis, the firm said.

The subsidiary, McDermott+Consulting, is a seven-member group led by health-care lobbyist Eric Zimmerman, a partner in the firm’s D.C. office.

Unlike much of the firm’s legal work, the health consultants do not bill clients by the hour, but rather charge a flat or project-based fee, or a monthly or annual retainer. But, as is the case with most law firms that have lobbying groups, those consultants still had to track their hours the same way the firm’s lawyers do. Now, under the new subsidiary, those consultants will no longer have to track their hours.

That change is significant because most law firms have historically measured the productivity of their lawyers and lobbyists by the number of hours they bill. But for many lobbyists at law firms who are not lawyers, hourly billing is seen as inefficient and a poor measure of productivity. Lobbyists at lobby shops that are not part of a law firm typically do not do hourly timekeeping.

McDermott has always done health-care lobbying, but the new arrangement — which will essentially create a boutique health-care lobby shop within the law firm — will give the consultants more flexibility, Zimmerman said.

“Political activities, business development activities, networking activities ... are part and parcel of having an effective lobbying capability, but not always easily translated into billable hours to a client,” he said. “Being able to be free from the expectation you’re going to bill a certain number of hours in a day or month or year enables you to focus on different, but nonetheless productive, uses of your time,” he said.

Catherine Ho covers law and lobbying for Capital Business, which she joined in 2011. She was previously a reporter at the Daily Journal in Los Angeles, covering LA civil courts and labor and employment law.
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