O’Melveny & Myers
O’Melveny & Myers
Founded: 1885 as Graves & O’Melveny
Sales: $372.5 million (2000)
NAIC: 54111 Offices of Lawyers
O’Melveny & Myers is one of the largest law firms in the world, with more than 700 lawyers working from its Los Angeles home office and several other offices in the United States, Europe, and Asia. Formed in 1885, it played a key role in making Los Angeles and Southern California one of the world’s population and business centers. It has important clients in the entertainment and media industries, including Walt Disney, Sony Pictures Entertainment, and Time Inc. It represents corporations in many other fields and government agencies in the United States and abroad. At the beginning of the 21st century, O’Melveny & Myers plays an important role in the globalization of the world economy and the major changes occurring due to the Information Age and electronic commerce.
Origins and Early Impact on Southern California
Founder Henry William O’Melveny was born in Central City, Illinois in 1859 and moved with his family to Los Angeles ten years later. There his father became a prominent lawyer and judge. The son graduated from the University of California at Berkeley in 1879 and two years later was admitted to the state bar after studying the law on his own and serving as an apprentice.
On January 2, 1885 Henry W. O’Melveny joined in partnership with Jackson A. Graves. The firm played a crucial role in much of the land title work associated with the population and real estate boom that lasted until 1888, when the railroads brought in up to 1,000 people a day. That transformed Los Angeles from a small Mexican community to a bustling American city.
Many prominent individuals and businesses in Southern California used the services of the small but growing law firm, including Newton Van Nuys, Farmers and Merchants Bank, The First National Bank, James B. Lankershim, and the Los Angeles Board of Trade. In 1891 O’Melveny began representing William G. Kerckhoff, a long-term client who played a major role in developing the area’s hydroelectric capacity. Near the end of his life, O’Melveny “concluded that the most important work he had done in his professional career was in the development of hydro-electric power,” according to William W. Clary in his history of the law firm.
In 1892 the partnership began representing the Chino Valley Beet Sugar Company, later acquired by Henry T. Oxnard’s American Beet Sugar Company. Later renamed the American Crystal Sugar Company, it retained the O’Melveny law firm for advice on water litigation, labor and water matters, and other concerns. Although its Chino and Oxnard factories had been closed, the sugar company in the 1960s still used the law firm as it sold its lands for residential and industrial developers.
The law firm also represented the Home Telephone Company when it was incorporated and gained a necessary franchise from the Los Angeles city government in 1897. Henry O’Melveny served the telephone company for several years after the turn of the century. The Home Telephone Company was a predecessor of the Pacific Telephone & Telegraph Company.
After oil was discovered in 1886 near Puente only about 20 miles east of Los Angeles, the O’Melveny law firm gained considerable work in that developing industry. It drafted oil leases, incorporated new oil companies, and provided litigation and other services for companies such as the Puente Oil Company (later acquired by Shell Company of California) and the Westlake Oil Company.
Meanwhile, the partnership assisted individuals in resolving conflicts over estates that involved valuable Southern California lands. A good example was its representation in the 1890s of heirs to the estate of Jose Diego Sepulveda and Rancho Palos Verdes. Some of that land eventually became part of San Pedro, California and Sepulveda Boulevard, which runs from San Pedro to West Los Angeles and San Fernando.
By 1900 more persons became lawyers to meet the challenges of a growing state that was rapidly industrializing. Gordon Bakken analyzed a sample of 1,168 California lawyers admitted to the bar through 1900 to track the profession’s trends. Not surprisingly, he found about half of those identified practiced in either San Francisco or Los Angeles where most of the business growth had been developing. Only 18.5 percent of the lawyers sampled were specialists. To help lawyers like Henry O’Melveny and others gain access to law books, the Los Angeles Bar Association was organized to fund a new law library. Just one year after the O’Melveny firm was started, the Law Library of Los Angeles was incorporated in 1886.
After the turn of the century, the O’Melveny law firm continued to represent local banks and also assisted California Governor Hiram Johnson as he worked with the dominant Progressive Party to pass a new state banking law in 1913. In 1914 the partnership prepared the incorporation papers for the new Kaspare Cohn Commercial & Savings Bank.
For years the O’Melveny law firm was involved with water companies and water-related litigation. For example, the flooding of the Colorado River in 1905 and 1906, which created a huge inland lake called the Salton Sea that threatened to destroy Imperial Valley crops, resulted in considerable litigation. The law firm successfully represented the plaintiff in Title Insurance, and Trust Company v. California Development Company, et al.
During World War I, the firm’s younger attorneys joined the military, while Henry O’Melveny played a major role in encouraging Los Angeles residents to buy Liberty Bonds and promoting other patriotic causes. In 1917 O’Melveny became a director of the Los Angeles Morris Plan Company, one of 88 Morris Plan companies across the nation designed to help people get loans who otherwise were not eligible for regular bank loans. For more than 30 years the First Industrial Loan Company, owner of the Morris Plan license rights, was a client of the O’Melveny law firm.
After World War I, the law firm gained two new clients: the Goodyear Tire & Rubber Company of California and the Pacific Cotton Mills Company. Since those two companies were among the first outside national companies setting up branch operations in Southern California, the O’Melveny law firm began to expand beyond its historic area.
In 1919 Henry O’Melveny became president of the Wilshire Boulevard Hotel Company, financed by the Chicago company S.W. Straus & Company. After the hotel company changed its name to the Ambassador Hotel Corporation in 1920, it provided much of the legal work for the law firm in the 1920s. Mean-while, the law firm’s partners provided legal counsel and served on the boards of many major organizations, including the California Institute of Technology, Security First National Bank, Northwestern Mutual Life Insurance Company, Northrop Corporation, Arrowhead Lake Company, the Union Oil Company, the Shell Company of California, and several Bing Crosby corporations.
When the firm moved in 1928 to new offices in the new Title Insurance Building, it employed 53 persons, including nine partners, 13 staff attorneys, and other clerks and staff members. Soon the Great Depression hit the nation. Although many businesses collapsed, many lawyers prospered as they served bankruptcy clients. The O’Melveny firm thus expanded in the 1930s, serving clients such as the Guaranty Building and Loan Association, which collapsed in 1930. The firm in 1931 also helped write a new state law to charter building and loan associations, later called savings and loan associations.
The firm continued to grow during the Great Depression, hiring 17 new lawyers just out of law school from 1934 through 1939. Much of this new manpower worked on the major receivership cases, including Paramount. In the 1930s many law firms, including O’Melveny, Tuller & Myers, started labor practices after the unions expanded following the passage of the famous Wagner Act or National Labor Relations Act in 1935. Many companies needed more legal assistance following the creation of the Securities and Exchange Commission and other New Deal legislation of the 1930s.
- The law firm of Graves & O’Melveny is founded in Los Angeles.
- J. H. Shankland joins the firm.
- Partnership is dissolved, and O’Melveny begins solo practice.
- Partnership of O’Melveny & Stevens is started with Henry John Stevens.
- With more partners, the firm becomes O’Melveny, Millikin & Tuller.
- Firm adopts permanent name of O’Melveny & Myers following death of Tuller.
- Firm begins its labor relations practice soon after Congress passes the Wagner Act.
- A Tax Department is established at the firm.
- A small branch office in Hollywood is opened.
- An office in Paris is opened, and then later closes.
- A presence in Washington, D.C., is established.
- The firm opens its New York City office.
- The London branch office is opened.
- The Tokyo office is launched.
- The firm’s Shanghai office is started.
In 1939 the firm adopted the permanent name of O’Melveny & Myers after Tuller died of a heart attack. Although some partners favored adding and deleting name partners as the firm had done in the past, they voted unanimously for the permanent change as a way to eliminate confusion. In 1941 Henry O’Melveny died at age 81 after a sudden illness. Typical of other Southern California newspapers, the Los Angeles Examiner on April 16, 1941 said, “It is seldom indeed that the life of one man can be so completely and intimately connected with the life of a great city.” With the 1939 adoption of a permanent name and the 1941 death of its founder, the law firm of O’Melveny & Myers marked a major turning point in its history.
World War II and the Early Postwar Years
The firm’s practice increased in World War II due to increased government regulations over many aspects of business and also the growth of Southern California’s industrial and military establishment. The law firm’s growth continued in the postwar period under the leadership of John O’Melveny, a son of the founder Henry W. O’Melveny. The firm’s expansion was influenced by the booming population of Los Angeles and the increase in value of goods manufactured in Los Angeles from about $2 billion in 1947 to more than $9 billion in 1962.
The firm’s Litigation Department, its largest department with five lawyers in 1946, became involved in numerous anti-trust lawsuits in the postwar era. For example, it represented Paramount Pictures, Twentieth Century-Fox Film, Warner Brothers, and Universal Pictures in a number of antitrust suits.
In February 1964 the law firm started its branch office in Paris, mostly to serve clients with Paris offices, including Hughes Aircraft Corporation, Lockheed Aircraft Corporation, and Northrop Corporation. Although most of the firm’s international work was in Europe, its Entertainment Law Department did some work in Malaya, Hong Kong, Ceylon, Tahiti, and other places. The firm also represented the Brown Citrus Machinery Company in its dealings in Mexico, Argentina, and Australia, and the Suburban Gas Corporation and Garrett Corporation in Latin America. Other international work was conducted in Japan, Nigeria, Algeria, and Saudi Arabia.
As of September 1, 1965, O’Melveny & Myers employed a total of 102 lawyers, including 37 partners, three of counsel, and 62 associates. At that point, no women had ever become partner, and the firm previously had employed just three women associates—the first two in 1943, and just one in 1965. This was typical for most law firms, for it was not until the 1970s that many firms began hiring more women lawyers.
Practice in the Late 20th Century and Beyond
In the late 1970s the legal profession began a major transformation to become much more competitive and business oriented. First, the U.S. Supreme Court ruled that professional association restrictions on advertising violated the First Amendment’s guarantee of free speech. That led to more advertising by lawyers, doctors, dentists, and other professionals.
Second, lawyers learned much more about comparative finances and management practices in large law firms with the start of two new periodicals, the National Law Journal and the American Lawyer. Previously, many large law firms were more or less secret organizations due to bar rules-that discouraged any contact with the press or historians. Within a few years many firms approached the new periodicals to make sure they were included. Both soon ranked the nation’s largest law firms based on the number of their lawyers, annual sales, and other financial statistics. That knowledge facilitated lateral hiring of experienced lawyers from rival firms. With the growth of the economy, new government regulations, the start of high-tech indus-tries, and many more mergers and acquisitions in the 1980s, law firms grew by leaps and bounds.
In the 1970s O’Melveny & Myers opened two new branches. In 1976 it became one of the first West Coast firms to open a branch in Washington, D.C. In 1979 it started its New-port Beach, California office to serve clients in the rapidly growing areas south of Los Angeles, mainly in Orange County and San Diego.
Further expansion followed. For example, in the 1980s the law firm opened four new branch offices, including ones in New York City in 1983, Tokyo in 1987, and San Francisco in 1989. In 1985 O’Melveny opened its London office, which served clients in many nations. Some of the London office’s representative clients at the end of the century were Advanced Micro Devices, Inc.; Bankers Trust Company; Bankers Trust International PLC; Goldman Sachs International; Dresdner Klein wort Benson; and Korn/Ferry International.
Other offices were started in the 1990s, including the Hong Kong office in 1994. Two years later the law firm gained approval from the People’s Republic of China to start a registered law office in Shanghai. The firm’s web site claimed in 2000: “O’Melveny is only one of a few international law firms to be granted this status, and our Shanghai office is now the largest foreign law office in the city.”
The firm also operated an office in Century City in West Los Angeles that originated with the firm’s Hollywood office started back in 1938. In 1999 the Los Angeles Board of Education sued O’Melveny & Myers, which had represented the school district for about 30 years. The law firm was sued for malpractice because it allegedly downplayed the environmental concerns at the half-completed Belmont Learning Complex. The O’Melveny law firm was defended by Gibson, Dunn & Crutcher, one of its long-term rivals based in Los Angeles.
One of O’Melveny & Myers’s most important lawyers in the late 20th century was Warren Christopher. He had served Presi-dent Lyndon Johnson as deputy attorney general, President Jimmy Carter as deputy secretary of state, and President Bill Clinton as his secretary of state. He led the international growth of the law firm as its chairman from 1982 to 1992. As O’Melveny & Myers’s senior partner, he was chosen as one of California’s ten most influential lawyers, according to a California Law Business survey of 200 California attorneys.
The American Lawyer in July 2000 ranked O’Melveny & Myers as the country’s 18th largest law firm, based on its 1999 gross revenue of $372.5 million. That made it the third largest law firm in Los Angeles, behind Latham & Watkins, ranked number four with $581.5 million, and Gibson, Dunn & Crutcher, ranked number 14 with $418 million in 1999 gross revenue.
Gibson, Dunn & Crutcher; Latham & Watkins; Skadden, Arps.
Bakken, Gordon Morris, “Industrialization and the Nineteenth-Century California Bar,” in The New High Priests: Lawyers in Post-Civil War America, ed. Gerald W. Gawalt, Westport, Conn.: Greenwood Press, 1984, pp. 125–49.
Clary, William W., History of the Law Firm of O’Melveny and Myers, 1885–1965, Los Angeles: privately printed, 1966.
Goldgaber, Arthur, “Gibson Dunn & Crutcher Maintains No. 1 Ranking on Law Firms List,” Los Angeles Business Journal, November 19 1990 29
Platt, Pearl J., A California Icon, California Business Journal, September 28, 1998, p. 13.
——, “The Top 100,” California Business Journal, September 28, 1998, p. 16.
Smith, Doug, “In Suing Law Firm, District Takes Risks,” Los Angeles Times September 18, 1999, p. 1.
“Solid Growth—But Little Crowing from L.A. Firms,” Recorder/Cal Law, January 11, 2000.
—David M. Walden