The run of consolidation in the US national market continues with Dallas-bred Locke Lord and Boston’s Edwards Wildman this week announcing plans to merge, forming a $675m practice that would sit just outside the top 50 of the Global 100.
The two firms announced they had signed a letter of intent yesterday (10 September) to merge early next year, forming Locke Lord Edwards, a 1,000-lawyer firm with 23 offices. The new practice would be chaired by Jerry Clements, the current chair of Locke Lord, with Edwards Wildman head Alan Levin becoming vice chair of the combination.
The Texan firm is the larger of the two entities, currently ranked 87th in the Global 100 with 2013 revenues of $415m, which represented a 3% fall on the previous year’s turnover. Edwards Wildman, meanwhile, saw revenues fall 9% to $311.7m. This means that the announced combined revenues of the merged entity is some way short of the 2013 revenues of the firms’ combined $726.7m.
In terms of profitability, Locke Lord’s profits per equity partner (PEP) of $935,000 are also significantly higher than Edwards Wildman, which posted PEP of $680,000 for 2013.
The agreement has been reached rapidly, after initial discussions began in July following an approach from Edwards Wildman, who had engaged US consultant Mestel & Company to compile a list of potential suitors.
The two firms have substantial London presences, both featuring in the top 50 US firms in London by size. Edwards Wildman, however, has suffered a difficult time lately, with a 10% drop in revenues to £27.8m in its latest UK LLP posting and the departure of a number of partners.
At the end of last year Locke Lord had 34 lawyers in the UK, against 81 at Edwards Wildman, though the latter firm has seen headcount fall this year. Edwards Wildman’s 20-partner London office could likely see further departures ahead of the Locke Lord merger amid expectations that a large group of partners is in talks to transfer to US corporate technology leader Cooley to launch its City arm.
It is understood that the Cooley talks are being led by Edwards Wildman commercial litigation head Laurence Harris, with a target for a mid-October launch.
Harris was part of the team that negotiated the 2008 merger between Edwards Angell Palmer & Dodge and London outfit Kendall Freeman.
Over the summer, Edwards Wildman saw five corporate partners including Shawn Atkinson, Stuart Blythe, David Ramm, Eero Rautalahti and Niall McAlister exit the firm. Such departures were said to be due to a feeling of a lack of support from the US together with issues of ‘disconnection’.
Commenting on the union, Locke Lord’s Clements said: ‘We will spend the next few months working on details and introductions, and hopefully be able to move forward together in a way that offers increasing breadth and depth to our clients. Both firms have been through a number of successful combinations, but we think this one opens the door for something truly transformational.’
Consolidation among mid-tier US firms in the Global 100 has been particularly evident in 2014, with Squire Sanders and Patton Boggs forming Squire Patton Boggs in July.
Also on the merger trail is Bingham McCutchen, which earlier this year approached a group of US rivals regarding a deal after a tough 2013 financial year. Morgan, Lewis & Bockius is viewed as the most likely potential tie-up, though mergers at this scale are notoriously difficult to pull off, particularly when one firm is in a weaker position.
As Legal Business reported last week, Bingham is currently braced for a major team departure from its highly rated City restructuring team to US rival Akin Gump Strauss Hauer & Feld.