Update, 9/20/12, 2:10 p.m. EDT: This story has been revised throughout to incorporate comments taken from a Delaware Law Weekly interview with Novak Druce managing partner and CEO Gregory Novak about his firm’s proposed merger with Connolly Bove Lodge & Hutz, as well as information about the future of Connolly Bove’s Los Angeles office and the roles that Jeffrey Bove and Rudolf Hutz would play should the merger be completed.
Novak Druce + Quigg and Connolly Bove Lodge & Hutz have entered into exclusive merger talks in a bid to form the seventh largest intellectual property firm in the United States with seven offices and 140 attorneys.
The merger, which is expected to close shortly before the end of the year, will result in a new entity that will operate as Novak Druce Connolly Bove & Quigg LLP. News of the merger was first reported by Delaware Law Weekly.
The new firm will be headquartered in Houston and will include Novak Druce’s offices in Houston, Cupertino, Calif., San Francisco and West Palm Beach, Fla., as well as Connolly Bove’s offices in Wilmington and Los Angeles. Both firms currently have Washington, D.C., offices that will be consolidated with Connolly Bove’s staff relocating to Novak Druce’s building.
Although some Delaware legal sources had speculated that the Los Angeles office might become a casualty of the merger, Novak Druce managing partner and CEO Gregory Novak confirmed in an interview with Delaware Law Weekly that the satellite office will remain open and that it will give the new firm a strong California presence with three offices in the state.
“A driving factor of this merger on the Novak Druce side was the geographic advantage of having a presence in both Northern and Southern California,” he said.
Although the new firm will be headquartered in Houston, Novak said the firm’s Wilmington office will play an important role in its operations.
“I don’t think you are going to see Wilmington become any lesser of an office,” he said. “There is not going to be any differences between our offices.”
Novak added that his firm had been eyeing Connolly Bove as a possible merger partner since the end of last year.
“Talks started at the end of last year, but we eventually decided just to be good friends,” he said. “But the interest always kept up and I gave [Connolly Bove managing partner] Jeff Bove a call two months ago and asked him if he was interested in restarting talks, which he was. That has taken us to today.”
Connolly Bove has changed since the merger talks initially began in late 2011. The firm’s 20-attorney commercial litigation unit was spun off earlier this month as an independent unit. The new firm, Connolly Gallagher, is led by former Connolly Bove partners Arthur “Chip” Connolly III and Henry “Hank” Gallagher Jr.
In addition to Connolly Bove’s former commercial litigation unit, Connolly Gallagher has included former Connolly Bove attorneys who practiced in other areas outside of intellectual property, including family, wills and estates, commercial real estate, insurance and bankruptcy.
Novak said the Connolly Gallagher split did not influence the merger negotiations.
“The Connolly Gallagher move had zero impact on the merger talks,” he said. “It wasn’t a positive and it wasn’t a negative.”
“I wasn’t involved in any of that,” he said. “As I understand it, the Connolly Gallagher guys are really good, but wanted to be a more Delaware-focused practice. I expect that our two firms will get along well with each other.”
Connolly Bove and Novak Druce both have a client roster that will compliment each other. Novak Druce typically represents computer and smartphone technology companies while Connolly Bove has a strong list of life science and pharmaceutical clients such as Pfizer Inc., BASF Corp., Bayer and Amylin Pharmaceuticals. Both firms handle both patent prosecution and litigation.
“The more we looked at this merger, the more it made sense,” Novak added. “They have the same attitude we do and have a blend of clients without any really significant overlap or conflict both in terms of clients and geographic locations. Connolly Bove has great depth and the life sciences and pharmaceutical side and we are involved in the software, computers and high tech world.”
“We are the mirror opposite of Connolly Bove,” he said.
In a statement released by both firms, Bove said that he was also excited about the possibilities for the firm once the merger is completed.
“Our combined firm will flourish with an even larger, more focused national platform,” he said in the statement. “Without doubt, our respective clients will benefit from the combined synergies of our new firm, and we could not be more excited about those possibilities. The combination fits perfectly with our long-term strategic goals.”
The newly merged entity will be led by Novak with Novak Druce’s executive partner Tracy Druce and Connolly Bove partner William E. McShane serving as the co-executive managing partners.
Novak Druce’s chief operating officer, Barbara Preston, will retain the same title in the new entity, according to sources familiar with the merger. Frank Stransky, who is Connolly Bove’s current chief financial officer, will have the same position in the newly merged firm.
Bove will serve as one of two senior adviser members of the merged firm’s executive committee, along with Don Quigg, who is a senior partner in Novak Druce’s Washington office, legal sources said.
“Jeff Bove will have an active role in the firm,” Novak said. “The senior advisory role is similar to the role of a non-executive chairman of the board in the corporate world.”
The new entity’s executive committee will be composed of 10 members with six from Novak Druce and four from Connolly Bove, but it was not yet known which partners will hold those positions. Novak said he was unsure which Connolly Bove attorneys will serve in that role.
Longtime intellectual property attorney Rudolf Hutz will remain with new entity. Hutz, who turned 74 in February, is considered by many to a legend in the world of intellectual property litigation. He has been with the firm for more than 40 years and has managed many significant patent cases during his career at Connolly Bove. Hutz is probably most well known for Dawson v. Rohm & Haas, in which he argued a patent case of first impression before the U.S. Supreme Court.
Novak Druce’s merger is the latest move for a firm that has been expanding of late. In August 2011, the firm opened a Cupertino office. The firm had also hired a number of attorneys formerly employed at Howrey, an intellectual property law firm that dissolved last year. Novak told DLW that he expects more expansion in the future.
“Yes there are expansion plans, but I can’t discuss them right now,” he said.