Boutique law firms in Los Angeles continue to be snapped up by larger firms as the market for mergers heats up in 2017.
The latest transaction will see Westwood- and downtown-based boutique firm Liner join industry behemoth DLA Piper, according to a joint announcement by the companies last week.
The planned merger would add 60 attorneys to DLA’s Century City and downtown offices, giving the firm approximately 110 local attorneys. That would put DLA at No. 13 on the list of the Business Journal’s largest law firms based on the most recent data published in March.
Liner Managing Partner Stuart Liner said the move came after a decade of offers from other large law firms, all of which were declined in short order. Liner said his perception of larger firms was always a negative one, but that view changed after a six-month courtship with DLA.
“I assumed that if we joined a firm like DLA there would be a loss of autonomy and a loss of the entrepreneurial spirit that we’ve enjoyed for the past 21 years,” Liner said. “It turns out that their view of practicing law, notwithstanding size and market share, is pretty similar to ours.”
The Liner firm focuses on litigation, real estate, business transactions and corporate restructuring. The firm was founded in 1996 and has an office in New York as well as its two outposts in L.A.
There are several other big names heading to DLA along with Liner’s eponymous managing partner. Entertainment lawyer Stanton “Larry” Stein, who represents A-list musicians such as Aubrey “Drake” Graham and Rick Ross and actors David Duchovny and Alan Alda, is set to join DLA along with former Los Angeles City Attorney Rocky Delgadillo, who now practices land use and development law.
Liner is not the first boutique law firm in Los Angeles to be absorbed by a larger firm this year. Downtown-based Caldwell Leslie & Proctor took a similar route in April, joining national powerhouse Boies Schiller Flexner, which is headquartered in New York.
Courting deals
Liner and Caldwell aren’t the only firms in Los Angeles being courted by larger rivals, according to a March study by legal consulting firm Zeughauser Group of Newport Beach. Eighty-eight percent of the firm respondents in the Los Angeles area said they had been approached about a merger in the past year, although only 42 percent of those firms said they were interested in going through with it. The biggest concern for law firms exploring the possibility of a merger was long-term stability, according to the study.
Liner’s proposed merger, however, came at the height of the firm’s profitability, according to its co-founder.
“We’ve had great success recently, with three record-breaking years in row,” Liner said. “Maybe some law firms wouldn’t have made a deal at a time like this, but for me, I wanted to come into this from a position of strength.”
Stuart Liner has been the firm’s managing partner since it was founded in 1996 and has represented clients in numerous transactions including Colony Capital, now Colony NorthStar Inc., and Summit Entertainment in its 2012 sale to Santa Monica’s Lions Gate Entertainment Inc.
Liner is joining one of the biggest firms in the world in DLA. The company, headquartered in Chicago, has more than 3,750 attorneys spread across offices in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia. The company had about $2.5 billion in revenue last year, according to the American Lawyer, making it the fifth-largest law firm in the world by that metric.
That size doesn’t faze Liner, who said he expects lines of communication to be open with his new bosses and anticipates he’ll retain some freedom for his team to operate independently. He said DLA was even amenable to allowing partners coming over from Liner to continue to implement alternative-fee agreements, calling it a positive sign regarding DLA’s willingness to be flexible.
“Obviously, I don’t do well in bureaucratic situations,” Liner said. “I don’t want to sound naive about going into a firm this size, but I do feel there is a remarkable transparency and open lines of communication at DLA.”
