Two of the largest law firms in the U.S. – Patton Boggs and Squire Sanders – have merged to create one of the largest in the world.
Squire Patton Boggs will employ around1,600 lawyers at 45 offices in 21 countries. That’s more lawyers than in the entire bars of North Dakota, Guam or the Virgin Islands.
The new mega-firm – which according to press releases will continue the extensive lobbying of Patton Boggs while expanding into corporate law, complex litigation, investigations, white collar defense, intellectual property, public policy, regulatory work, capital markets, labor and employment, restructuring and insolvency, real estate, sovereign representation, tax, and public and infrastructure finance – will rank among the top 25 globally.
What we’re talking here is the Bigfoot of Biglaw.
And in fact the chairman of Patton Boggs mentioned foot-size when he announced the merger: “Through our combination with Squire Sanders we are … bringing together our rich experience with one of the world’s most expansive practice and geographic footprints.”
What The Merger Might Mean For You
All of this is well and good. But what if anything does it mean to the solo practitioner in Murphy or the real estate lawyer in Manteo?
Here are four takeaways:
1. The bigger the firm, the bigger the risk management headaches. A major snag in merger negotiations – and one that had scuttled prior deals – was a messy litigation matter Patton Boggs has been mired in for years. The case involved Chevron, environmentalists and the country of Ecuador. A former Patton Boggs client (the Amazon Defense Front) said the firm “put its own interests above those of the people it was supposed to represent” and “unceremoniously abandoned the clients without so much as notifying them.” The firm forked over millions of dollars in settlement. Two lawyers who worked on the case were exiled from the merger, reports the ABA Journal.
2. Merger mania may just be starting. Law firm consultant Altman Weil is predicting “continuing robust merger activity” in 2014. This follows a “banner year” in 2013, which saw 88 law firm mergers - up from 60 in 2011 and 2012.
3. It’s not all about the money. The driving force behind most mergers is money. Firms want to expand their market reach and increase their revenue. But a successful union depends on many factors other than dollars and cents. “The glue that holds a firm together is culture and strong leadership,” according to Above the Law. “Like with herding cats, mergers have the potential for disruption if the cats aren’t playing nice together.
Case in point: the bankrupt behemoth Dewey & LeBoeuf. A New York Times article detailed the so-called “dysfunctional practices” that helped spell the firm’s demise. The list included greed, jealousy, lewd emails, unsustainable debt, outrageous compensation packages, favoritism, intra-office backstabbing and partner conflicts.
4. The big firms are getting bigger – and mergers are the reason. “The number of lawyers at the country’s largest law firms rose last year, but the increase was largely because of mergers with foreign firms, not domestic hiring,” according to the New York Times, reporting on a National Law Journal survey. “The increase of 3.9 percent in the numbers at the top 350 law firms was the biggest in any year since the recession began in 2008, but the growth from mergers instead of domestic hiring underscores the contraction that has beset the legal industry over the last five years.”
Globalization has arrived. Consolidation will continue. Increasingly, firms will be looking beyond their own office walls for strategic alliances across town. Across state lines. And across the globe.
The good news for small firms and solo practitioners: technology can let you in on the action. You might be physically located in Murphy or Manteo, but the Internet opens the door to Milan or Managua.
- Politico http://www.politico.com/story/2014/05/squire-patton-boggs-merger-107072.html?hp=l4
- Bloomberg News http://www.bloomberg.com/news/2014-05-27/republicans-sue-over-contribution-limits-business-of-law.html
- ABA Journal http://www.abajournal.com/news/article/squire_sanders_and_patton_boggs_will_merge_on_june_1/
- Above The Law http://abovethelaw.com/2014/06/merging-in-the-post-recession-market/#more-323144
- New York Times http://dealbook.nytimes.com/2014/06/09/foreign-mergers-expand-ranks-at-big-law-firms/?_php=true&_type=blogs&_r=0
Jay Reeves a/k/a The Risk Man is an attorney licensed in North Carolina and South Carolina. Formerly he was Legal Editor at Lawyers Weekly and Risk Manager at Lawyers Mutual. Contact email@example.com, phone 919-619-2441.