By Matthew Belloni and Eriq Gardner
With studios slashing budgets and star salaries sinking faster than DVD sales, this year hasn't exactly been the most lucrative in entertainment law. So it's a little odd to see the National Law Journal taking a look
(reg required) at all the big-name law firms clamouring for a piece of Hollywood.
The article counts 37 large, non-L.A.-based firms that now claim to have practices devoted to entertainment. These national firms aren't opening talent boutiques (yet), but they're trying to muscle in on work traditionally handled by firms such as Manatt Phelps & Phillips, Loeb & Loeb, O'Melveny & Myers, and the other firms known for entertainment.
For example, Chicago-based Wildman Harrold Allen & Dixon recruited studio marketing specialst Nancy Derwin-Weiss an a crew from LA's Foley & Lardner to launch a Hollywood practice group, midwest firm Robins Kaplan Miller & Ciresi and Philadelphia's Blank Rome picked up talent litigators from the implosion of LA's Dreier outpost last winter, and Washington-based Venable is growing an LA practice with a strong entertainment focus.
Honestly, why all the interest? The entertainment business is in the midst of a contraction, not an expansion, and with it a lot of the most lucrative legal work has dried up. A few years ago, as money flowed from Wall Street to Hollywood, the boom generated a corresponding flood of finance-related work. And studios, flush with cash from soaring DVD sales and boxoffice, were less likely to scrutinize bills or hunt around for deep discounts on hourly rates.
Those days are as gone as the $20 million actor deal. The market is said to be rebounding lately, but activity is nowhere near where it was only two years ago. Many lawyers who have spent their careers specializing in entertainment deals or litigation are now taking non-industry work. And studios are more frugal than ever, to the point where some bigger LA firms are passing on representing them altogether. Plus, as the article points out, talent clients and smaller entertainment companies generally can't support big firm hourly rates (which is what helped give rise to the commission-based boutique firms in the first place)
Despite the seemingly endless parade of otherwise smart moneymen willing to back film projects, we've always been skeptical of the theory that everyone wants to be a part of Hollywood, regardless of the cost. After all, big law firms are sophisticated businesses; they wouln't push into this area unless they believed there was money to be made. But we might be underestimating the allure of the business. If law firms do indeed have their eyes on Hollywood, it might just be a vanity play, pure and simple. But if the play doesn't pay dividends, how long can it last?