Firm Watch
Jul. 30, 2002
Boutique Lyon & Lyon Seeks Suitor to Prevent Dissolution
These days, the attorneys at intellectual property boutique Lyon & Lyon probably are wishing they'd stuck with their engineering jobs. With the boutique's future in doubt, rumors are flying that the firm will dissolve if it can't find a merger partner. Meanwhile - in what may be good news for the firm - San Francisco's Townsend and Townsend and Crew confirmed two weeks ago that it is considering Lyon & Lyon as a potential merger partner.
These days, the attorneys at intellectual property boutique Lyon & Lyon probably are wishing they'd stuck with their engineering jobs.
With the boutique's future in doubt, rumors are flying that the firm will dissolve if it can't find a merger partner. Meanwhile - in what may be good news for the firm - San Francisco's Townsend and Townsend and Crew confirmed two weeks ago that it is considering Lyon & Lyon as a potential merger partner.
"We are talking to Lyon & Lyon," confirmed Susan Spaeth, managing partner of operations for Townsend and Townsend.
But Spaeth also said that Townsend and Townsend was exploring other options, which she would not specify.
Some in the legal industry speculate that the merger talks may go nowhere, or worse.
"When a firm goes to the bargaining table, they are going to vet every partner," says Richard Matthews, a legal recruiter with San Francisco's Richard Matthews & Associates. "And some partners would be cut deals that are acceptable to them, while other partners may be cut a deal that is not going to be terribly attractive."
Lyon & Lyon, however, would be an attractive conquest for Townsend and Townsend, according to Matthews.
The merger would give Townsend and Townsend its first Southern California presence, and it would be an ideal match for struggling Lyon & Lyon, a firm that has been devastated by a steady stream of partner defections over the past two years.
John McConaghy, member of Lyon & Lyon's executive committee, would not comment on the negotiations while dismissing reports from sources that the 90-attorney firm has been considering breaking up.
McConaghy confirms that Lyon & Lyon's New York office, a 10-lawyer group headed by partner James Shalek, has agreed to join Proskauer Rose's Manhattan headquarters.
"Life is up in the air," McConaghy says. "But you're still going to be hearing about Lyon & Lyon."
A merger with the remaining offices of Lyon & Lyon would fatten 150-attorney Townsend and Townsend by nearly a hundred attorneys should it acquire the entire firm. Lyon & Lyon has attorneys in Irvine, La Jolla and Los Angeles as well as Washington, D.C., and New York. Townsend and Townsend has offices in San Francisco, Walnut Creek, Palo Alto, Denver and Seattle.
Last year, Lyon & Lyon failed to close a merger deal with Cleveland-based Jones, Day, Reavis & Pogue, which led to the defection of six partners to Jones Day's Los Angeles office. Another six partners dispersed to other firms, including Squire, Sanders & Dempsey and Irell & Manella.
In all, the firm has lost more than 30 attorneys in the past two years.
"There are some very fine lawyers left," Los Angeles legal recruiter Michael Waldorf says, "but not many in the way of the rainmaking type."
Liz Valsamis
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