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News Update

law firm merger.jpgLately it seems there's been a lot of law-firm merger activity. The statistics bear this out, although there's disagreement as to degree. From a piece by Leigh Jones in the National Law Journal:

Law firms didn't slow down their march to the altar in the second quarter of 2008, but just how many mergers occurred depends on whom you ask. Altman Weil announced a sharp increase in merger activity during the second quarter. It pegged law firm mergers at 26, compared with 18 in the first quarter.

At the same time, competitor Hildebrandt International announced steady merger activity, with a total of 14, compared with 12 mergers in the first quarter of 2008.

There has also been a steady increase in rumors about law firm mergers. Some of them will turn out to be true, some not. The fact that some gossip won't pan out doesn't make it any less interesting. Lawyers need some way to pass the time, and speculating about their competitors -- or themselves -- is as good a way as any.

Here's an excerpt from a recent profile of our media idol, former Us Weekly and Star editrix Bonnie Fuller, from the New York Times:

Ms. Fuller knows the dyad of funny / hurtful, having run cover articles about people getting divorced, pregnant and tossed into rehab. Sometimes those stories were true.

"There have been a lot of false pregnancies and laugh-out-loud groaners," says Simon Dumenco, a longtime analyst of the magazine industry who writes a column for Advertising Age. "What she has done is gotten at a kind of essential truth that is less about the specifics of the gossip. This endless speculation and estimation about the lives of these people has become the stuff of culture."

In that last sentence, replace "these people" with "these law firms," and that's ATL for you. A lot of what we write in these pages may turn out to be inaccurate, but we're getting at "a kind of essential truth that is less about the specifics of the gossip."

So, with that caveat in mind, are you interested in hearing the latest law-firm merger gossip? Read more -- about rumored deals involving Baker & McKenzie, Heller Ehrman, Nixon Peabody, Pillsbury Winthrop, Sonnenschein Nath & Rosenthal, and Harris & Moure (who?) -- after the jump.

1. Nixon Peabody / Pillsbury Winthrop. We recently wrote about a possible merger here. Some commenters dismissed it as crazy talk. Since our earlier report, however, we've heard by email from others who say they've heard the same thing.

Could it be a giant feedback loop? Maybe. But it seems fairly undisputed, at least as to Nixon Peabody, that the firm "has been looking for a merger for some time now," as one tipster puts it.

2. Foley & Lardner. From a tipster, a barebones report:

Heard directly from a partner at Foley & Lardner that they are in serious talks to merge. You might want to follow up on this one.

We did follow up, but Foley had no comment.

3. Baker & McKenzie / Heller Ehrman. We've written about this one endlessly. A few more tidbits, from different sources:

"Only a small percentage of the [Heller] partners/shareholders were in the know about the identity of the merger candidate (as of last week). Of course, Baker & McKenzie has been all over the blogs (yours included) for the last two weeks. B&McK fits the generic description I have been given (large, corporate practice), but so do many firrms. Those who do know are definitely not talking. I also know that many partners (called shareholders) are totally in the dark -- or were as of last week -- and are quite unhappy about the way they are being treated, sort of in the paternalistic "trust me" mode by management that obviously does not think them to be important enough to be included in the knowledge window....."

"If the merger should be with Baker, I (and many others) wonder how Heller's once-stellar insurance recovery practice would fit in? Or if the people at the top of trying to make it fit in?"

"We're all so anxious about what's going to happen. I'm sure everything will be ok in the end regardless, but still, it's a bit stressful. But yeah, I'm positive that Baker's the one they're still in talks with, and it's getting to the point where they're including more shareholders in the discussion. There will still need to be a shareholder vote and everything though before the final decision is made, and god only knows when that'll be."

4. Baker & McKenzie / Harris & Moure. Regardless of what's happening with Heller and Baker -- some commenters have speculated that Baker is leading Heller on -- Baker may have some other romantic possibilities on the horizon:

I know this one is going to sound a bit strange, but I have heard it from two good sources now and I am starting to believe it. Baker & McKenzie has no presence in the Pacific Northwest and it should and the rumour I am hearing is that they are on the verge of swallowing up Harris & Moure, a micro international law firm that is about to open an office in Qingdao, China. Story is that it will put B&M into two cities at once. This is not verified, of course, but I am dying to know if this is true because I see this sort of deal as a real trend.

We didn't reach out to Baker on this one, in light of their earlier statement about merger rumors, issued in response to the Heller talk:

Like all leading law firms, we are continuously studying the market for strategic growth opportunities. At any given time, we may be in discussion with a number of individuals, practice groups or firms around the world. By Firm policy, we do not comment on such discussions until they are positively concluded.

5. Sonnenschein Nath & Rosenthal. From The Lawyer (via the ABA Journal):

Elliott Portnoy, the man who pulled the trigger on the jobs of 124 lawyers and staff just over a month ago, said the lateral hiring pipeline that has seen dozens of partners join the firm already this year is now likely to slow.

But Portnoy reveals that he is already focusing on implementing an ambitious strategic plan that could see Sonnenschein increase dramatically its scale and geographical reach. The plan includes a major domestic merger deal, offices across the Continent and China and re-entry into the ­London market with the acquisition of a local firm.

So that's a round-up of what we've heard lately. If you have some info to pass along, please email us (subject line: "Law Firm Merger Mania"). Thanks.

A tale of two takes on law firm mergers in '08 [National Law Journal]
Sonnenschein's Ambitious Growth Plans Call for 2 Mergers [ABA Journal]
Sonnenschein: Portnoy bids to return firm to US 'A' list []
101 Secrets (and 9 Lives) of a Magazine Star [New York Times]

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