Firm Watch
Aug. 6, 2002
Lyon & Lyon Stands Alone at Alter, Again
Instead of a marriage proposal, Los Angeles' Lyon & Lyon got a Dear John letter from San Francisco's Townsend and Townsend and Crew.
Instead of a marriage proposal, Los Angeles' Lyon & Lyon got a Dear John letter from San Francisco's Townsend and Townsend and Crew.
Susan Spaeth, Townsend and Townsend managing partner of operations, spilled the beans to reporters on July 25, saying "talks between Townsend and Lyon are off as of today."
The news broke for most Lyon & Lyon partners that afternoon when reporters called John McConaghy, who is running the 80-lawyer intellectual property boutique. McConaghy e-mailed the news to partners as soon as he heard.
McConaghy says he wasn't surprised that he heard the news through a reporter because he wasn't the lead negotiator on the deal. Still, he says, he had been looking forward to developing a West Coast intellectual property powerhouse with the 150-lawyer Townsend and Townsend. The two firms began talking merger about a month ago.
"I enjoyed those people," he says of the lawyers and staff he had met at Townsend and Townsend. "I'm sorry this is the outcome if that is indeed the case."
Neither Spaeth nor McConaghy could be more specific about why the talks fell through, saying they were observing a confidentiality agreement covering the talks.
Speculation in the legal industry has been that Townsend and Townsend might cherry-pick a group of Lyon & Lyon partners rather than taking the whole firm.
All Spaeth would say is that Townsend is pursuing "different opportunities" for expanding into Southern California, adding that a merger with Lyon & Lyon "ended up not being in line" with the firm's strategic plan for growth.
McConaghy doesn't know what's next for Lyon & Lyon. Thirty lawyers have left the 100-year-old firm in the past two years, including rainmakers Douglas Olson and Richard Warburg and a group of six partners, including Lyon's managing partner, who defected to Jones, Day, Reavis & Pogue last year. More recently, Lyon's 10-lawyer New York City office split from the firm to join Proskauer Rose.
Some believe the firm will dissolve if it cannot find a merger partner.
"Things are up in the air here," McConaghy says. "We haven't resolved what we're going to do yet."
Lyon & Lyon has offices in Irvine, La Jolla, Los Angeles and Washington, D.C., while Townsend and Townsend has offices in San Francisco, Walnut Creek, Palo Alto, Denver and Seattle.
Erik Cummins
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