October 12, 2011 1:53 PM
Faegre & Benson, Baker & Daniels Say Their Merger Is Officially On
Posted by Brian Baxter
UPDATE: 10/12/11, 4:00 p.m., EDT. Additional information on the merger has been added to the last four paragraphs of this story to incorporate information gathered during a subsequent conversation with Faegre & Benson chairman Andrew Humphrey.
Nearly two months to the day after confirming that they had entered formal merger talks—and on the heels of their respective partnerships voting to approve the union—Faegre & Benson and Baker & Daniels announced Wednesday that they will combine operations under the Faegre Baker Daniels name as of January 1.
As The Am Law Daily has previously reported, the two firms confirmed in August that they had begun to discuss the possibility of joining forces to create a combined entity with about 770 lawyers and, according to the most recent Am Law 100 figures, total gross 2010 revenues in excess of $400 million.
Taking a page from Canada's cutting-edge law firm merger marketing playbook, the firms announced their union via a virtual midday press conference. During the session, Faegre chair Andrew Humphrey and Baker CEO Thomas Froehle, Jr., read prepared statements (see video below) touting the merger's geographic synergies—none of the combined firm's 13 offices present any duplication—and multiple benefits to clients.
Humphrey will serve as chief executive partner of the combined firm, with Froehle becoming its chief operating partner. Both men said they consider Faegre Baker Daniels a national firm poised to grow globally. (The firm's foreign outposts include offices in Beijing, Shanghai, and London.)
Faegre and Baker both qualified for inclusion in The Am Law 200 in 2010. Minneapolis-based Faegre, which has roughly 450 lawyers, saw its gross revenues decline nearly 10 percent last year to $256.5 million. On the flip side, the 320-lawyer, Indianapolis-based Baker saw its gross revenues rise nearly 6 percent to $152.5 million. The two firms showed similar profits-per-partner figures: $530,000 at Faegre; $520,000 at Baker.
Humphrey and Froehle answered a handful of questions during the virtual press conference. Both said they don't expect the merger to lead to any layoffs. They also noted that Faegre Baker Daniels will not have a headquarters location and that Baker's existing consulting arm, B&D Consulting, will be renamed Faegre BD Consulting. (The business employs about 45 professionals.)
Humphrey, who currently serves as Faegre's chairman, told us after the press conference that Faegre and Baker jointly retained the services of Lisa Smith, a principal at consulting firm Fairfax Associates, to advise both parties on implementing their 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.)
"Lisa helped identify best practices and the governance structure of the combined firm and she's been our primary consultant in that role," Humphrey said. He declined to comment on the particulars on how differences in the compensation to each firms' equity and nonequity partners would be resolved postmerger.
Humphrey did note that it will be a "unified compensation structure" for all partners, and that the combined leadership for both firms spent a great deal of time over the last year determining the best way to manage "partner expectations" and "incentivize people the right way" ahead of the merger.
An international auto alliance that Faegre entered into in China two years ago with Detroit-based Honigman Miller Schwartz and Cohn will continue at Faegre Baker Daniels. "We think very highly of that arrangement, which helps us leverage our expertise in China with the auto expertise that Honigman has," Humphrey said.
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