The final numbers are in and it’s official: 2011 was a comeback year for law firm mergers, and nowhere more than in Los Angeles.

The number of law firm mergers across the country jumped 67 percent last year, while Los Angeles led all other cities with six, according to a study this month by the Hildebrandt Institute. In each of those, an L.A. boutique was acquired by a larger firm, generally from outside California and with a bigger national presence.

The spike in mergers is a sign that the overall industry has recovered enough so that larger firms aren’t afraid to make moves. But at the same time, the downturn has also made it harder for smaller firms to find work.

“There’s a broad consolidation under way in the industry,” said Brad Hildebrandt, chairman of the New York law firm consultancy Hildebrandt Institute. “Competition for business is quite intense and some local and regional firms may feel that they are at a disadvantage.”

Notable mergers included the acquisition of Quateman LLP and Hennigan Dorman LLP by St. Louis firm Polsinelli Shughart PC and New York’s McKool Smith PC, respectively. Quateman and Hennigan have said that their mergers were driven by a need to link up with a national platform, and not with any financial difficulties.

Though it’s becoming harder to run a small firm, any concerns about independent L.A. firms dying off is premature, said Sandy Lechtick, president of Woodland Hills legal search firm Esquire Inc.

“I expect there to be a continuing of this trend, but I must say there still are some smaller firms that have done quite well that are not looking to merge with anybody,” Lechtick said.

There are no signs of the trend slowing down. So far, the number of mergers has been almost double what they were at the same time last year, according to the study.

New Office, Lower Rates

David Allen opened Dallas law firm Akin Gump Strauss Hauer & Feld LLP’s first L.A. office in 1997, growing it from eight attorneys to around 90 as the office’s managing partner. But last February, Allen left with five other attorneys to launch an L.A. office for smaller Indianapolis firm Barnes & Thornburg LLP, citing a need to lower billing rates.

Since then, the L.A. outpost of the Indiana firm has grown to 16 attorneys – 12 of them from Akin Gump. The latest is Howard Fabrick, a former Akin Gump partner who joined Barnes this month.

Like many other major law firms, Akin Gump is increasingly emphasizing areas with higher billing rates, such as private-equity work and energy, Allen said. Those attorneys who don’t fit are the ones who’ve left for Barnes.

Despite the stream of Akin Gump attorneys joining Barnes, competition between the two firms isn’t direct because they focus on different types of work, industry insiders said. Allen himself waved off the idea there was any animosity between the two, and took pains to praise his old firm.

“I think there’s not much tension,” he said. “They’re just pursuing a different strategy, and the people who came here just didn’t fit into that strategy as well.”

Newest arrival Fabrick is a labor and employment attorney with decades of experience who negotiates labor contracts for the entertainment industry. His work is often on a movie-by-movie basis and doesn’t offer the kind of steadily high billing rates that other labor and employment work, such as employment litigation, might.

“In terms of my unique specialty area in the entertainment industry, Akin really wasn’t a firm, as fine as it was, that fully understood what I did for a living and wanted to support me in developing that practice area,” said Fabrick, 73.

Akin Gump, meanwhile, doesn’t appear to be hurting. In May, it scored a coup by bringing in a group of nearly 20 renewable energy attorneys, led by heavyweights Edward Zaelke and Adam Umanoff, from the L.A. office of Chadbourne & Parke LLP.

High Intellect

The move this month of Jill Pietrini to the Century City office of Sheppard Mullin Richter Hampton LLP is a boost for the firm’s plans to expand its intellectual property practice.

Pietrini, 50, chaired the IP group at West L.A. firm Manatt Phelps & Phillips LLP, and will bring a team of three attorneys and five staffers. Her clients include Summit Entertainment; Fifty-Six Hope Road Music; and entertainers Metallica, Will Smith and Gwen Stefani.

“I was happy at Manatt, but this was really the next step in my career,” she said. “Sheppard has a bigger, more diverse IP practice.”

The downtown L.A. firm has been trying to grow its IP practice, doubling the size of the group in the last five years to about 75 attorneys. In October, it hired a new practice co-chair, Nick Setty, away from Fish & Richardson PC. In 2010, it hired Steve Korniczky, who had chaired Paul Hastings’ IP group until 2009.

“We continue to be in growth mode,” said Carlo Van den Bosch, group co-chair.

Pietrini’s move, meanwhile, marks another loss of an IP lawyer for Manatt. In the past year, that firm has lost Susan Hollander, former IP co-chair, and Seth Gold, L.A. partner, to K&L Gates LLP.

Staff reporter Alfred Lee can be reached at alee@labusinessjournal.com or at (323) 549-5225, ext. 221.

For reprint and licensing requests for this article, CLICK HERE.