August 11, 2011 7:38 PM
Baker & Daniels and Faegre & Benson Confirm Merger Talks
Posted by Brian Baxter
"We are engaged in strategic combination discussions, which we announced to our partners today," says Thomas Froehle, Jr., chair and chief executive partner at Baker & Daniels, a 280-lawyer firm based in Indianapolis.
Froehle says that Baker & Daniels established an internal task force last year to evaluate tie-ups with other firms. The formal merger talks with the 446-lawyer, Minneapolis-based Faegre, which Froehle says have been going on for several months, are a result of that initiative. Faegre chair Andrew Humphrey, whom Froehle says he has known for years, is taking the lead for his firm in the negotiations. (Faegre confirmed the talks in its own statement.)
According to the most recent Am Law 200 financial data, Faegre saw its gross revenues decline nearly 10 percent in 2010 to $256.5 million, while profits per partner increased 5 percent to $530,000. Baker & Daniels, meanwhile, saw gross revenues rise nearly 6 percent in 2010 to $152.5 million, while profits per partner increased 2 percent to $520,000.
Revenue per lawyer at Baker & Daniels was up almost 8 percent to $545,000 last year, while Faegre's RPL dropped nearly 2 percent to $575,000. Baker & Daniels has 103 equity partners; Faegre has 213.
Froehle says that the matter of what name any newly combined entity would take has yet to be determined. Such an entity would have between 750 to 800 lawyers, Froehle says, adding that both firms believe a merger would be in the best interest of their current clients. (Baker & Daniels also has a 50-employee consulting arm in Washington, D.C., which handles public policy and lobbying work.)
"We consider this a great way to be aligned in the way in which we serve our clients, and it provides a lot of opportunities to our clients from both firms' perspectives," says Faegre business development director Adam Severson. "Each firm holds a very similar position in our primary geographic markets."
Baker & Daniels and Faegre & Benson have 13 offices between them, with no duplication in locations. Faegre's U.S. offices are located in Minneapolis, Boulder, Denver, and Des Moines, and the firm has international outposts in London and Shanghai, where it formed an international auto team with Detroit-based Honigman Miller Schwartz and Cohn two years ago. Baker & Daniels has four offices in Indiana, as well as locations in Beijing, Washington, and Chicago, where the firm set up shop three years ago.
The next several weeks will see the firms continue their due diligence, Froehle says, noting that no major conflicts have emerged between the two as of yet. The firms see synergies in their corporate, intellectual property, and life sciences practice groups, he adds.
Lisa Smith, a principal at consulting firm Fairfax Associates, is advising both Baker & Daniels and Faegre & Benson on their discussions for a formal merger. Smith was previously the head of the law firm strategy and structure practice at Hildebrandt Baker Robbins, the former consulting arm of Thomson Reuters.
Additional reporting by Tom Huddleston Jr. and Sara Randazzo.
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