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Mergers increase following dry spell

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Legal management consulting firm Altman Weil reports that through September 2011, law firm mergers nationwide are up 79 percent compared to last year.

According to the firm’s “MergerLine” statistics, among the 46 mergers announced by Oct. 3, 19 were cross-state partnerships. Ice Miller’s merger with Columbus, Ohio-based Schottenstein Zox & Dunn is one such union. One week before the Ice Miller announcement, rumors were confirmed that Baker & Daniels has been discussing a merger with Minneapolis-based Faegre & Benson. While some people may be wondering if Indianapolis has merger fever, it’s more likely that what’s happening locally, and nationally, has been in the works for a while.
 

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Joseph B. Altonji, principal founder of the Chicago-based firm management company LawVision, explained that mergers – from the time conversations between two firms begin until the deal is complete – take time.

“When we had the initial skid in mergers – when everything went crazy at the end of 2008 – basically everything that was going on back then got put on hold,” Altonji said. During 2009, merger activity idled before picking back up in 2010.

“I think if you are sitting in the category of multiple years of weak performance, you start to have to think about: what’s our future? How are we going to change this course?” Altonji said. And the answer to that question, for some firms, is to expand their reach through a merger.

The urge to merge

Carole Silver, professor at Indiana University Maurer School of Law, said that sometimes the impetus for merger is when a firm realizes it has grown as much as it can in a geographic area, and it wants to reach other markets.

She said firms might try to expand their client base by sending a trusted lawyer from their office to another location, with instructions to find new clients and build the satellite office one lawyer at a time.


silver-carole-mug.jpg Silver

“But that’s slow, and it’s risky,” Silver said. “More often, a client will say: we have business in location X, would you please send a lawyer to location X?”

Without contacts and resources in “location X,” a firm may find that what makes more sense is to attempt to merge with a firm that already has connections and clients in the target geographic area. Firms may also be looking to expand their catalog of services, by courting small firms with specialty practices.

“We’re in a market today where the total volume of legal services needed really hasn’t been growing since the recession,” Altonji said. “The only way you can grow is by acquiring market share.”

Altonji said that firms may have trouble expanding their talent pool in one geographic area without running into conflicts, and that’s why firms may need to look across state lines for a suitable partnership.

Altonji said that in recent years, international mergers have become more popular.
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“Those kinds of mergers don’t happen every day, so there’s only so many possibilities,” he said. But in the past, international expansion was either not an option or was incredibly difficult.

Silver said that at one point, a U.S. firm – if it had an office in Japan – could staff that office only with American lawyers. Eventually, regulations became more relaxed.

“As soon as that regulatory barrier fell away, the firms started taking advantage and hiring local lawyers,” she said. Firms soon began setting up offices in the United Kingdom, hiring local lawyers with more connections to the community.

Now, firms with a U.K. presence may be poised to enter a new market.


wright-del-mug.jpg Wright

Del Wright Jr., assistant professor at Valparaiso University School of Law, said that India – despite performing many outsourced tasks for U.S. firms – has been a closed market for American lawyers.

“India just announced that they are considering opening their market … but they were initially going to open it more to U.K. firms,” Wright said. “But because the U.S. can merge with U.K. firms, there’s a chance that there could be a firm with a fairly strong India presence.”

While hiring local lawyers in other countries may help firms find the clients they need, it may have downfalls, too.

“What you lose is that relationship to the home office,” Silver said.

Making it work

“The question with mergers is how do you integrate?” Silver said. “Or can you continue to exist without thoroughly integrating? A general presumption is that a merger means you have to integrate … but I don’t know whether that’s true.”

Victor Indiano was an attorney for the former patent law firm of Jenkins Coffey Hyland Badger & Conard when it merged with Barnes & Thornburg in 1982. He stayed with Barnes & Thornburg for three years, then moved to Ice Miller, and later to Bose McKinney & Evans. “And then I finally decided I don’t play well with other children,” he said. He started the two-attorney Indiano Law Group in 2000.

Indiano equates an attorney’s relationship with his or her firm to a marriage.

“If you look at your friends and you look at your friends’ spouses, you’ll see that they’re married to very different people,” he said, adding that the traits one person values in a mate may be less important to another person.

He said that lawyers may expect reasonable income, the ability to have control over their own lives, job security and personal job satisfaction.

“Those factors balance differently at different firms,” he said. “After a merger, it is highly likely that the culture will change, which will cause some of the people in the merger to seek other situations.”

But as some lawyers leave large firms to start their own practices, some smaller and solo firms are hoping to unite with large offices that may have resources they lack.

“Up until 2008, we were in a world were everybody was growing … you didn’t have to think too hard to grow your firm, and now you do,” Altonji said. “Some mergers out there are alternatives to irrelevance.”•
 

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  1. Yes diversity is so very important. With justice Rucker off ... the court is too white. Still too male. No Hispanic justice. No LGBT justice. And there are other checkboxes missing as well. This will not do. I say hold the seat until a physically handicapped Black Lesbian of Hispanic heritage and eastern religious creed with bipolar issues can be located. Perhaps an international search, with a preference for third world candidates, is indicated. A non English speaker would surely increase our diversity quotient!!!

  2. First, I want to thank Justice Rucker for his many years of public service, not just at the appellate court level for over 25 years, but also when he served the people of Lake County as a Deputy Prosecutor, City Attorney for Gary, IN, and in private practice in a smaller, highly diverse community with a history of serious economic challenges, ethnic tensions, and recently publicized but apparently long-standing environmental health risks to some of its poorest residents. Congratulations for having the dedication & courage to practice law in areas many in our state might have considered too dangerous or too poor at different points in time. It was also courageous to step into a prominent and highly visible position of public service & respect in the early 1990's, remaining in a position that left you open to state-wide public scrutiny (without any glitches) for over 25 years. Yes, Hoosiers of all backgrounds can take pride in your many years of public service. But people of color who watched your ascent to the highest levels of state government no doubt felt even more as you transcended some real & perhaps some perceived social, economic, academic and professional barriers. You were living proof that, with hard work, dedication & a spirit of public service, a person who shared their same skin tone or came from the same county they grew up in could achieve great success. At the same time, perhaps unknowingly, you helped fellow members of the judiciary, court staff, litigants and the public better understand that differences that are only skin-deep neither define nor limit a person's character, abilities or prospects in life. You also helped others appreciate that people of different races & backgrounds can live and work together peacefully & productively for the greater good of all. Those are truths that didn't have to be written down in court opinions. Anyone paying attention could see that truth lived out every day you devoted to public service. I believe you have been a "trailblazer" in Indiana's legal community and its judiciary. I also embrace your belief that society's needs can be better served when people in positions of governmental power reflect the many complexions of the population that they serve. Whether through greater understanding across the existing racial spectrum or through the removal of some real and some perceived color-based, hope-crushing barriers to life opportunities & success, movement toward a more reflective representation of the population being governed will lead to greater and uninterrupted respect for laws designed to protect all peoples' rights to life, liberty & the pursuit of happiness. Thanks again for a job well-done & for the inevitable positive impact your service has had - and will continue to have - on countless Hoosiers of all backgrounds & colors.

  3. Diversity is important, but with some limitations. For instance, diversity of experience is a great thing that can be very helpful in certain jobs or roles. Diversity of skin color is never important, ever, under any circumstance. To think that skin color changes one single thing about a person is patently racist and offensive. Likewise, diversity of values is useless. Some values are better than others. In the case of a supreme court justice, I actually think diversity is unimportant. The justices are not to impose their own beliefs on rulings, but need to apply the law to the facts in an objective manner.

  4. Have been seeing this wonderful physician for a few years and was one of his patients who told him about what we were being told at CVS. Multiple ones. This was a witch hunt and they shold be ashamed of how patients were treated. Most of all, CVS should be ashamed for what they put this physician through. So thankful he fought back. His office is no "pill mill'. He does drug testing multiple times a year and sees patients a minimum of four times a year.

  5. Brian W, I fear I have not been sufficiently entertaining to bring you back. Here is a real laugh track that just might do it. When one is grabbed by the scruff of his worldview and made to choose between his Confession and his profession ... it is a not a hard choice, given the Confession affects eternity. But then comes the hardship in this world. Imagine how often I hear taunts like yours ... "what, you could not even pass character and fitness after they let you sit and pass their bar exam ... dude, there must really be something wrong with you!" Even one of the Bishop's foremost courtiers said that, when explaining why the RCC refused to stand with me. You want entertaining? How about watching your personal economy crash while you have a wife and five kids to clothe and feed. And you can't because you cannot work, because those demanding you cast off your Confession to be allowed into "their" profession have all the control. And you know that they are wrong, dead wrong, and that even the professional code itself allows your Faithful stand, to wit: "A lawyer may refuse to comply with an obligation imposed by law upon a good faith belief that no valid obligation exists. The provisions of Rule 1.2(d) concerning a good faith challenge to the validity, scope, meaning or application of the law apply to challenges of legal regulation of the practice of law." YET YOU ARE A NONPERSON before the BLE, and will not be heard on your rights or their duties to the law -- you are under tyranny, not law. And so they win in this world, you lose, and you lose even your belief in the rule of law, and demoralization joins poverty, and very troubling thoughts impeaching self worth rush in to fill the void where your career once lived. Thoughts you did not think possible. You find yourself a failure ... in your profession, in your support of your family, in the mirror. And there is little to keep hope alive, because tyranny rules so firmly and none, not the church, not the NGO's, none truly give a damn. Not even a new court, who pay such lip service to justice and ancient role models. You want entertainment? Well if you are on the side of the courtiers running the system that has crushed me, as I suspect you are, then Orwell must be a real riot: "There will be no curiosity, no enjoyment of the process of life. All competing pleasures will be destroyed. But always — do not forget this, Winston — always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face — forever." I never thought they would win, I always thought that at the end of the day the rule of law would prevail. Yes, the rule of man's law. Instead power prevailed, so many rules broken by the system to break me. It took years, but, finally, the end that Dr Bowman predicted is upon me, the end that she advised the BLE to take to break me. Ironically, that is the one thing in her far left of center report that the BLE (after stamping, in red ink, on Jan 22) is uninterested in, as that the BLE and ADA office that used the federal statute as a sword now refuses to even dialogue on her dire prediction as to my fate. "C'est la vie" Entertaining enough for you, status quo defender?

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