Monday brought the news of the latest large law firm merger. The WSJ Law Blog first reported that Thelen Reid and Brown Raysman will merge next in December.

The Thelen press release quoted Brown Raysman’s Julian S. Millstein, a founder of the firm, as saying:

“This combination gives us the presence we have wanted on the West Coast and in Asia for our technology, media, and IP practices, and the platform we need to service and grow our real estate finance practice.”

I thought the word “platform” sounded vaguely familiar. I searched the Wired GC archives and found that word came up earlier when Shaw Pittman and Pillsbury Winthrop merged last year.

Hmmm. Using the same consultants?

The Thelen Reid press release can’t resist mentioning its profits per partner: $850,000. The WSJ Law Blog cheekily notes that Brown Raysman’s are $720,000.

Any talk of client value?

Update 1 Nov 06: Here we go again…

I wanted to resist the temptation to comment on the NY Times law firm associate article today but I …just…can’t…

Here it is if you missed it. The WSJ Law Blog also weighed in.

First off, you have to love the picture, with two compliant Weil Gotshal newbies dutifully holding a BlackBerry for the photographer. The dapper WG associate with the belt holster ought to know better than to stand in front of the “Weil,” though.

But then there’s the punchline: the new starting rate in NYC is clearing out at $145,000.

That may not be a lot of money in the Big Apple. It does, however, get the attention among some of the faithful clients of Weil Gotshal. They see this for what it is: their law firm is paying lawyers with no experience more than it pays anyone save top-level managers. You’d think that this would have repercussions long-term for such firms. Apparently you’d be wrong.

But the money is not the worst part.

The worst part is that some firms float this trial balloon:

The inevitable issue for clients as well as the firms is whether higher salaries are reflected in increased hourly rates. But Michael J. Gillespie, a partner at Debevoise & Plimpton, another law firm based in New York, said: “There’s not really a connection between salary levels and hourly rates. We set salaries at whatever is necessary to attract and retain the best associates. We set hourly rates by client demand and market conditions based on firms operating at our level in the market.”

Say what?

No connection between associate salaries and hourly rates?

That means partners are taking less to give first year associates more? And more to the rest of the associate classes to avoid overly compressing them?

Perhaps partners should try these on when standing next to clients:

So law firms (in NJ at least) are given the ethical go-ahead to own other law firms as subsidiaries, according to this article in the New Jersey Law Journal.

Fellow Legal Blog Network member Larry Bodine is quoted as calling this development a “potential gold mine” for law firms, allowing them to grab firms in hot practice areas and casting them off when the worm turns. More from Mr. Bodine, including the text of the opinion, here.

Sounds intriguing for a few adventurous law firms. Sounds like real fun for consultants, bankers and developers of legal indentity products.

But for the average law firm of some scale I really wonder if this isn’t precisely the wrong thing at the wrong time.

Doesn’t buying another firm only give you three things? A claim upon receivables, a hope that the good lawyers stay and a prayer that clients remain as well?

As a GC, I would have to think about this, and wouldn’t necessarily see this as a negative for a law firm that’s owned by another firm. But it sort of seems at first blush that such a firm is saying between the lines that it couldn’t cut it on its own.

It that good positioning in the marketplace?

If the management of some major firms are spending time looking at other firms or ancillary businesses, what does that say about their confidence in the existing business model?

Could this NJ ethics development, coupled with one of the results from the Clementi Commission in England (non-lawyer ownership of law firms; more from Bruce MacEwen here), spell the start of law firm roll-ups and eventual IPOs?

Boy, would I love to read a Form S-1 from a major law firm.

But if Wachtell Lipton ever goes public, sign me up. Something tells me that they are too busy focusing on their core transactional business that throws off over $2.3 million per year in revenue per lawyer.

An ethics opinion a gold mine? Or an open mine shaft? Time will tell.