Economic Consulting Veteran Launches Firm Focused on M&A Antitrust

Jonathan Orszag, a seasoned economic consultant and co-founder of Compass Lexecon, is venturing into a new chapter with the launch of Econic Partners, a consultancy that aims to navigate the complex landscape of mergers and acquisitions (M&A). Orszag, along with eight other economists, believes that the future of corporate consolidations will involve even greater scrutiny and regulatory hurdles, particularly in the realm of antitrust.

The firm, which is backed by Goldman Sachs Asset Management’s alternatives unit, will initially focus on providing economic consulting services related to M&A antitrust issues. This move comes at a time when companies are facing heightened scrutiny from regulators, making expert economic advice valuable in getting big deals approved. According to Bloomberg, Orszag pointed out that the revenue generated by economic consulting firms from antitrust work has surged.

In an interview, Orszag shared his perspective: “I’ve been at this for 25 years, and the amount of revenue that economic consulting firms are now earning from antitrust work has skyrocketed in the past two decades.” His experience includes involvement in high-profile transactions like Amgen’s $27.8 billion acquisition of Horizon Therapeutics and Agrium’s merger with Potash Corporation of Saskatchewan.

The firm’s co-founders include Nathan Miller, who previously served as the chief economist in the Department of Justice’s antitrust division under President Biden, and Kevin Murphy, a professor of economics at the University of Chicago Booth School of Business. The Econic team also includes several former officials from the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC).

As per Bloomberg, Christine Varney, chair of the antitrust practice at law firm Cravath Swaine & Moore LLP, praised the firm’s team, stating that many significant M&A deals would struggle to gain regulatory approval without such specialized expertise.

Economic consultants like those at Econic analyze the potential effects of corporate mergers, using advanced economic theories to explain the outcomes. These consultants can often command high fees for their work. For example, Orszag’s consulting services for fuboTV Inc. in its litigation with Walt Disney Co. were billed at $1,800 per hour.

Miller, who is also a professor at Georgetown University’s McDonough School of Business, highlighted the importance of staying ahead of emerging trends like artificial intelligence and algorithms. He emphasized that Econic can tackle these new challenges, ensuring they remain at the forefront of economic thought.

Orszag’s extensive career includes serving as an economic policy adviser under President Bill Clinton. He and his brother Peter Orszag, the CEO of Lazard Inc., founded Sebago Associates, which later merged with Robert Willig and Janusz Ordover’s practices to create Compass. Compass Lexecon, which was eventually acquired by FTI Consulting in 2006, remains a leading player in the economic consulting sector.

However, Orszag’s departure from FTI Consulting in 2023 was not without controversy. A dispute over control and compensation led to legal tensions between Orszag and FTI, with the company alleging he violated his contract by threatening to launch a competing firm. Orszag, for his part, denied these allegations and filed a counterclaim.

Econic, which has secured additional funding from prominent figures like Robert Willig and Janusz Ordover, already has a team of about 100 employees. While the consultancy is currently focused on antitrust, Orszag plans to expand into other areas of economic consulting in the future. He emphasized that the firm’s growth would be driven by delivering top-tier work, which would, in turn, attract more clients and top talent.

According to Bloomberg, Orszag’s vision is clear: “The goal is to be the best economic consulting firm. My view of the world is that it’s a virtuous cycle. If you do good work, you attract clients that hire you, which attracts good people to help work with you on it.”

Source: Bloomberg