As Economy Cools, Intellectual Property Practices Heat Up
It’s said that lawyers can find work in good times and bad, they’re just different kinds of work.
A case in point is playing out in the current economic slowdown: local intellectual property firms say they are seeing solid revenue growth.
“We’ve seen a lot of litigation involving trademark infringement and unfair competition,disputes between corporations,” said Clifford Frieden, managing partner with Costa Mesa-based Rutan & Tucker LLP, Orange County’s largest law firm.
The reason: the sharpening of competition in a down market can lead to some sharp legal clashes, too.
“When a slowdown hits and clients start losing sales, they make it up by growing market share,” said Faye Morriseau, managing partner of the Irvine office of Chicago-based McDemott, Will & Emery. “And they boost market share by enforcing their patents,so an economic slowdown actually increases the amount of patent protection and related litigation out there.”
Gary Singer, managing partner of the Newport Beach office of Los Angeles-based O’Melveny & Myers LLP, agreed that economic slowdowns historically have meant more litigation related to intellectual property and patent protection.
“Plus, when high-tech slows down, other sectors pick up,” Singer said. “Intellectual property transactions in life sciences, biotechnology and medical devices are all going up.”
Because of this, Singer said, O’Melveny has assumed a “cautiously optimistic” stance about this year.
James Bear, managing partner of Knobbe, Martens, Olson & Bear LLP, also said that intellectual property law is “an anti-cyclical business.”
Newport Beach-based Knobbe Martens focuses solely on intellectual property, and has grown year-on-year revenues by about 20%, according to Bear. It plans to hire 25 attorneys this year, Bear said. That would bring its attorney count to 132 and could make it the county’s biggest law office by year-end.
“We kind of held our breath coming into the year, wondering how things were going to progress,” Bear said. “But we’re approaching on-target growth so far this year, and biotechnology work for us continues to grow.”
The 13-year-old Irvine office of McDermott, Will & Emery is having its best year ever, so far, according to Morriseau. It already has grown its attorney roster 50%, from 17 to 25, in the past nine months. It plans to add a dozen more attorneys here in the next year to bolster the office’s work in intellectual property, general corporate and securities law, as well as general trial law.
The company also is seeing robust growth in its litigation business, especially in patent protection and intellectual property, Morriseau said.
Patents and intellectual property will continue to be the main drivers of revenue growth at McDermott’s Irvine office, irrespective of any economic downturn, Morriseau said.
Meanwhile, the slowing economy also has given a counter-cyclical boost to the merger and acquisition field, according to John Giovannone, a capital partner with McDermott in Irvine.
“We’re doing a substantial amount of merger and acquisition work,” Giovannone said. “While the prices are deflated right now, many clients view this as an opportunity to acquire companies at bargain-basement prices. Cash is king right now, and clients that have cash can pick up some real bargains.”
O’Melveny’s Singer said he has seen an increase in transactions in the public offering market, fueled in part by a low-interest-rate environment that tends to encourage leveraged purchases of companies. n
