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November 3, 2010 11:57 AM

Kilpatrick Stockton, Towsend to Merge After All

Posted by Brian Baxter

UPDATE: 11/4/10, 9:40 a.m. The Fulton County Daily Report, a sibling publication, has more on the merger between the two firms.

Kilpatrick Stockton, a 415-lawyer Atlanta-based firm, has agreed to merge with 185-lawyer IP shop Townsend and Townsend and Crew, according to a press release issued by both firms Wednesday morning.

The combined firm, which will be named Kilpatrick Townsend & Stockton, will officially launch on January 1, 2011, with 17 offices throughout the U.S. The two had pursued a possible union earlier this year, but called off the talks this past July, citing client conflicts, according to The Recorder, a sibling publication.

The merger is the latest in a busy year for law firm tie-ups, especially trans-Atlantic deals. Sonnenschein Nath & Rosenthal and Denton Wilde Sapte officially merged last month to create SNR Denton, Hogan & Hartson completed its merger with Lovells in May to form Hogan Lovells, and Squire, Sanders & Dempsey and Hammonds currently are discussing a possible combination.

Townsend has been looking for a merger partner for some time. Last December, firm chairman James Gilliland, Jr., stepped down amid a slowdown in two of the firm's strongest practice areas, litigation, and patent prosecution. At the time, sources told The Recorder that some Townsend partners were pushing for a merger.

Gilliland's successor, Maureen Sheehy, didn't deny her firm was looking for a merger partner earlier this year, and news leaked in May that Townsend had been approached by Kilpatrick and another firm. Kilpatrick and Townsend have not indicated when they resumed their merger talks.

What's clear is that with this deal, Townsend has found a way to preserve its practice by joining with a larger partner. That has been the fate of several other IP shops over the past two years. Nelson Mullins Riley & Scarborough picked up Boston IP boutique Lahive & Cockfield last month, Howrey acquired San Francisco-based Day Casebeer Madrid & Batchelder last year, and Ballard Spahr bought out Atlanta shop Needle & Rosenberg in June 2008. Business didn't go as well for firms like Darby & Darby and Morgan Finnegan, both of which shut down after failing to find merger partners.

Once the announced merger takes effect, Kilpatrick co-managing partner William Dorris will become chair of Kilpatrick Townsend. Former Kilpatrick co-managing partner Diane Prucino and Townsend's Sheehy will serve as co-managing partners of the newly combined firm.

"From intellectual property to corporate to litigation, Kilpatrick Townsend clients will have access to a diverse group of nearly 650 attorneys with the resources to offer clients expanded, strategic expertise," Dorris said in a statement.

Kilpatrick had gross revenue of $245.5 million last year and profits per partner of $615,000, according to the latest Am Law 200 financial data. Townsend's profits per partner were $810,000, while gross revenue was $161 million in 2009.

The merger with Townsend comes almost a month after Kilpatrick acquired ten lawyer Oakland firm Bell, Rosenberg & Hughes, which specializes in construction project development and litigation. Kilpatrick has been seeking a beachhead in California to compete with other Atlanta-based Am Law 100 firms like King & Spalding and Alston & Bird.

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