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February 1, 2012 2:50 PM

Southern Strategy: Baker Donelson, Womble Carlyle Continue to Grow by Snapping Up Small Shops

Posted by Brian Baxter

UPDATE: 2/2/12, 11:45 a.m. K&L Gates has expanded into Italy following its merger with Milan firm Marini Salsi Picciau Studio Legale, according to Legal Week.

The law firm consolidation trend continued this week, with Womble Carlyle Sandridge & Rice absorbing a three-lawyer South Carolina shop and Baker, Donelson, Bearman, Caldwell & Berkowitz executing its third merger in less than four months by picking up a seven-lawyer Houston firm.

In both instances, the additions come in areas where the two Am Law 200 firms have been expanding their respective operations in recent months.

On Wednesday, Memphis-based Baker Donelson announced in a brief video message that it has scooped up Houston's Drucker, Rutledge & Smith, a four-partner shop specializing in civil litigation defense. The acquisition gives Baker Donelson about 630 lawyers in 18 offices throughout the southeastern United States and London.

Wednesday's announcement comes about three months after Baker Donelson said it would acquire another Houston firm, seven-lawyer Spain Chambers, and about four months after it made its first foray into Florida by adding six-lawyer Orlando operation Litchford & Christopher.

Womble Carlyle, meanwhile, has decided to triple its bet on South Carolina, where the Winston-Salem, North Carolina–based firm last expanded by picking up an office in Charleston via a merger with 44-lawyer Buist Moore Smythe McGee in April 2011. Womble Carlyle already has an office in Greenville.

Womble Carlyle announced late Tuesday that it is opening an office in The Palmetto State capital, Columbia, by acquiring Hall & Bowers. The three-partner firm also specializes in civil litigation, and its name partners have expertise in political law and state government affairs.

The urge to merge is not exclusive to the U.S. Slater & Gordon, a 260-lawyer Australian class action shop that became the first firm in the world to go public in 2007, has announced it will acquire 230-lawyer British plaintiffs firm Russell Jones & Walker in a groundbreaking deal, according to sibling publication The Asian Lawyer.

Slater & Gordon, whose path to the public markets was detailed by sibling publication The American Lawyer three years ago, has served as a template for U.K. firms considering whether to take advantage of new alternative business structure (ABS) rules that let nonlawyers own stakes in law firms.

The ABS rules went into effect in the United Kingdom this year, and just last week Liverpool's Silverbeck Rymer became the first British firm to be bought wholesale in a deal that saw it acquired for roughly $30.5 million by software and outsourcing company Quindell Portfolio, according to U.K. publication Legal Week.

Both the Silverbeck Rymer and Russell Jones acquisitions require the approval of the U.K.'s Solicitors Regulation Authority.

As previously noted by The Am Law Daily, the U.K.'s market for law firm mergers, like its U.S. counterpart, has been particularly hot among regional and midtier firms. Still, not every firm is rushing to the altar. Liverpool-based DWF and Manchester-based Cobbetts called off their ongoing merger talks this week due to "uncertainty in market conditions,” according to Legal Week.

Two British firms that did manage to achieve a successful union were Cumberland Ellis and Wedlake Bell, which announced in a statement this week they will combine their operations as of April 1. The two London-based firms hope their merger will create a top 100 firm in the U.K. by gross revenue, according to The Lawyer.

Legal Week reports that one of the largest U.K. firms, 800-lawyer Bird & Bird, agreed last month to form a strategic alliance with Danish firm Bender von Haller Dragsted in a bid to bolster its current offices in Hamburg, Helsinki, and Stockholm. London-based rival Herbert Smith also intends to proceed with its proposed tie-up with Australian legal giant Freehills by July 1, according to Legal Week.

Other foreign law firm nuptials over the past week include Dublin’s Beauchamp Solicitors acquiring Landwell Solicitors (the Irish legal arm of accounting giant PricewaterhouseCoopers), French firm Flichy Grangé acquiring health and safety boutique Plichon, and independent German firm Heussen merging with Stuttgart-based Wahlert.

Of course, mergers themselves aren’t always good news for lawyers at the firms that opt to join forces.

Larry Watanabe, a legal recruiter at Solana Beach, California–based Watanabe Nason, recently told the Daily Journal in Los Angeles that mergers between midsize or regional firms presented an opportunity for those entities to oust partners with smaller or underperforming books of business.

Case in point: After Bryan Cave acquired struggling Holme Roberts & Owen in December, a significant number of the more than 80 partners from the Denver-based Am Law 200 firm are now listed as of counsel or counsel at the combined entity, according to a story this week by the Denver Business Journal.

Former Holme Roberts managing partner Randall Miller, now a member of Bryan Cave's management committee and the head of the firm's offices in Colorado, disputed the claim that a large number of his former colleagues had lost equity status. Miller told the DBJ that only a "handful" of Holme Roberts partners who are either well shy of retirement age or keen to reduce their workload were asked to change their status.

 

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