As law firms expand their geographic reach and increase depth in practice areas, more firms are looking to merge or acquire other shops for business development opportunities and to raise the profile of their firms.
Those moves take time, both to find a firm that is a good fit for a merger or acquisition and to take the steps to ensure a smooth transition. Locally, many of those pieces came together for large firms this year.
On Jan. 1, Ober|Kaler officially merged with Tennessee-based Baker Donelson. After Labor Day, Saul Ewing merged with Arnstein & Lehr, a firm based in Illinois and Florida. That same day, Ballard Spahr LLP announced that it is merging with Minneapolis-based Lindquist & Vennum effective Jan. 1 of next year. Ballard Spahr also merged with media law firm Levine Sullivan Koch & Schulz on Oct. 1.
Over the summer, Womble Carlyle, which has an office in Baltimore, announced that it was joining forces with Bond Dickinson LLP, a firm with offices across the United Kingdom. Together, that firm officially became Womble Bond Dickinson in October.
“The merger activity this year that has impacted firms with offices in Baltimore is the most significant merger activity we have seen in many years,” said Randi Lewis, managing director at global attorney consultancy firm Major, Lindsey & Africa.
For many attorneys at the former Ober|Kaler, the Baker Donelson acquisition was a big change. A regional firm of 105 lawyers grew to a national firm with 700.
“Many of my colleagues at Ober have only worked at one law firm,” said James E. Edwards Jr., managing shareholder in Baker Donelson’s Baltimore office in an interview this fall. “None of us had been through a process like this before.”
Now that the firm has gone through its initial transition phase, it is shifting its focus toward helping clients see the merger’s advantages. Lawyers have been conducting symposiums with clients to spread the word about combined skills and services.
“Now we have the opportunity to really revisit the reasons why we merged,” Edwards said.
One of the main reasons the former Ober|Kaler merged with Baker Donelson was to bring together their large health care practices.
“We had complementary skill sets that made a lot of sense,” Edwards said.
Attorneys from both firms are leading that practice, called Baker Ober Health Law, named so that clients in health care know the firms had merged.
A large firm such as Baker Donelson can also develop systems and data that is too costly for a firm with 50 or even 100 lawyers to undertake. Now, the former Ober|Kaler has a knowledge management group that does everything from budgeting to setting up alternative fee arrangements for clients.
The firm can also respond to requests for proposals more efficiently than a smaller firm and has a more robust marketing and business development group, Edwards said.
Merger activity involving firms that are based elsewhere and have a Baltimore presence may also affect the local market in the coming years.
“It’s been a great year for these firms that have merged. Down the road, one might expect that this merger activity will redound to the benefit of the lawyers in the Baltimore offices of those firms,” Lewis said.
For example, Womble Carlyle, which has a growing Baltimore office with about 18 attorneys, merged with Bond Dickinson, a firm with offices in the United Kingdom. The combined Womble Bond Dickinson has 420 partners and 1,000 lawyers overall, including eight offices across the pond. The expansion opens doors for Womble Carlyle clients, including those in the Baltimore area, to expand their businesses internationally.
Saul Ewing’s Baltimore office, one of the largest law firms in Maryland, has already played in a role in its merger with Arnstein & Lehr. Managing partner Barry F. Levin is based in the Baltimore office and one of the partners in that office, Jason M. St. John, is in charge of the combined firm’s integration effort.
Philadelphia-based Ballard Spahr has been rife with merger activity in the latter half of 2017, and Baltimore managing partner Jon Laria has high hopes for its local impact.
On Oct. 1, Ballard Spahr merged with media law firm Levine Sullivan Koch & Schulz, a move that may draw local business in that practice area.
“I’m hopeful that we will be able to get referrals from other firms in this market who are looking for truly elite media law representation,” Laria said a few weeks after the merger was official.
Ballard Spahr’s merger with Lindquist & Vennum is official Jan. 1. The merger, one of the largest Ballard Spahr has ever done, will add a group of experienced corporate partners to the firm’s business and finance department and increase its M&A capabilities, especially in private equity.
The combined firm will have more than 650 lawyers in 15 offices across the country.
“The Baltimore office has a very good but small corporate practice. This is an opportunity for us to have a bigger platform,” Laria said.
Ballard Spahr has 44 attorneys in its Baltimore office and is the 19th largest firm in Maryland, according to The Daily Record’s 2017 ranking of the largest firms in the state.
A report released last week by Major, Lindsey & Africa predicted that large firms across the country will continue to expand through mergers and acquisitions.
“Though middle-market firms remain robust, there is a reduction in the number of single-city firms with national practices — the ones that remain are ripe for acquisition,” the report said.
That movement may also happen with local firms, Lewis said, but the legal market may also move in a different direction.
“There are many highly regarded single-city firms in Baltimore. For the most part, they prefer to remain independent. To the extent that their financial health remains robust, they’re less likely to want to be acquired by national firms,” Lewis said.
Instead, a national firm seeking a Baltimore presence may have greater success convincing a group of lawyers from a firm in Baltimore to launch the Baltimore office of that firm, similar to how Jackson Lewis, Duane Morris and Womble Carlyle came to town, Lewis said.