UPDATES: 10/15/13, 6:10 p.m. EDT. A statement from a Cox spokesman has been added to the 11th paragraph of this story. 10/16/13, 9:45 a.m. EDT. The Recorder, a sibling publication, has more on Cooley’s merger with Dow Lohnes. Correction. 10/16/13, 6 p.m. EDT: The original version of this story included an incorrect figure for the number of lawyers Cooley will have once it adds the Dow Lohnes attorneys it is absorbing. The correct figure is 750. The abstract and 17th paragraph of this story have been revised to include the correct information. We regret the error.
Cooley and Dow Lohnes announced Tuesday that they will merge as of January 1 in a deal that secures a new home for 54 lawyers—including 15 partners—from the latter’s headquarters in Washington, D.C.
Dow Lohnes, a former Am Law 200 firm known for its telecommunications, media, and higher education expertise, has seen its fortunes slip in recent years. The firm’s 15-lawyer Atlanta office, which as noted by sibling publication the Daily Report has suffered from a series of lateral departures in recent months following the loss of key client Cox Enterprises, will not be part of the merger with Cooley.
The tie-up has already been approved by Dow Lohnes’s partnership, says firm managing partner John Byrnes, who told The Am Law Daily in an interview Tuesday morning that his firm has been discussing a potential merger “on and off” for most of the summer and early fall.
The Am Law Daily reported last month that Dow Lohnes was holding talks with potential merger partners as it grappled with an abrupt drop in head count as a result of the decision by Atlanta-based Cox to diversify its panel of outside legal advisers. Dow Lohnes has continued to advise Cox, the nation’s third-largest cable system operator, on regulatory matters.
Byrnes says that a pair of D.C.–based Zuckerman Spaeder lawyers—Thomas Mason, chair of the firm’s legal profession and ethics practice, and law firm management and business partner Marshall Wolff—served as outside counsel to Dow Lohnes on its merger with Cooley.
That search led to Cooley, Byrnes says, in part because of its “complementary client base” in the technology and media fields. Last week Dow Lohnes advised a newly formed company purchasing 33 radio stations from NextMedia Group, and the firm has long been a powerhouse in the telecom and higher education arenas, according to our previous reports.
Byrnes says his firm’s higher education practice, which had few conflicts with potential suitors given its work in a field with few competitors, dovetails nicely with Cooley’s startup and technology expertise, as many education providers adopt online learning and other tech-based business strategies. Byrnes also cites Cooley’s capital markets, IP, litigation, and technology expertise as being good fits for Dow Lohnes.
Cooley also had something else that Dow Lohnes—a firm founded in 1918 but now down to less than 100 lawyers—needed in any merger partner: size.
“[Growing larger] has certainly been something of a discernible trend the past few years when it comes to serving clients more effectively,” Byrnes says. “Unless you’re a specialized boutique, which we really weren’t, you need to associate with a firm with broader expertise and a larger geographical footprint. And we couldn’t be more pleased than to find that with Cooley.”
Byrnes declined to get into specifics about Cox’s decision to look elsewhere for its nonregulatory legal work, but did say that Dow Lohnes’s Atlanta office will remain with the firm during its transition period and that he and his colleagues will help its Atlanta lawyers and staffers find new homes.
Cox’s general counsel and corporate secretary Shauna Sullivan Muhl did not respond to a request for comment about Cooley picking up most of Dow Lohnes, nor did former Dow Lohnes partner Peter Cassat, who serves as general counsel of Cox subsidiary the AutoTrader Group. A Cox spokesman says that the company wishes Dow Lohnes well and expects to continue using the firm’s lawyers for telecom regulatory work while they are at Cooley.
Cooley CEO Joseph Conroy, who joined the firm in 1999 from Hunton & Williams, told The Am Law Daily that Cooley was a relative latecomer to the Dow Lohnes discussions. (The Am Law Daily noted in September that several Am Law 100 firms had held merger talks with Dow Lohnes.)
Six weeks ago Conroy received a call from Dow Lohnes administrative law partner M. Anne Swanson—the two had previously worked on a media transaction together—about potentially making a play for the firm. Conroy says he was skeptical at first, as Dow Lohnes’s Atlanta office didn’t fit into Cooley’s plans, but his interest grew when he looked at the target firm’s “core partners.”
Conroy and Ryan Naftulin, the head of Cooley’s D.C. office and vice chair of the firm’s business department, took the lead negotiating the terms of a merger. Conroy says that his firm made no guarantees to clinch the deal, adding that the compensation schemes between both firms are similar, a notion seconded by Byrnes, who will become a member of Cooley’s compensation committee and assist with integration efforts between both firms.
“This is a transformative transaction for us,” says Conroy, noting that more than 75 percent of Cooley’s partners gave the merger their approval in a vote on Saturday. The firm has put a premium in recent years on growing its D.C. and Northern Virginia operations, which handles work for clients like Elon Musk’s Space Exploration Technologies, as well as the PayPay cofounder’s Hyperloop idea.
Cooley’s merger with Dow Lohnes is the Am Law 100 firm’s first since its 2006 tie-up with New York’s Kronish Lieb Weiner & Hellman, although Cooley has made several large bulk lateral hires in recent years, such as bringing on 35 lawyers from the Venture Law Group amid the dissolution of Heller Ehrman in late 2008. According to the most recent Am Law 100 financial data compiled by The American Lawyer, gross revenue at Cooley was up 9.3 percent to $617 million in 2012, while profits per partner rose nearly the same percentage to $1.5 million.
The Dow Lohnes name will disappear as a result of Tuesday’s announcement, as the combined 750-lawyer firm will go live under the Cooley banner on January 1, pushing the latter’s attorney head count in D.C. to about 130, according to sibling publication The Blog of Legal Times.
Byrnes says that Cooley, which has 11 offices in the U.S. and a base in Shanghai, will assume his firm’s D.C. lease and that Dow Lohnes lawyers will begin moving into Cooley’s new offices in the Warner Building sometime in the first quarter of next year. (Cooley opened its D.C. office back in 2005.)
Dow Lohnes’s union with Cooley wasn’t the only large firm merger deal announced Tuesday.
Fort Lauderdale–based Becker & Poliakoff confirmed that it will absorb 13-lawyer Taylor & Carls, a Central Florida firm specializing in community associations, according to sibling publication the Daily Business Review, which last week reported on the merger between Am Law 200 firm Carlton Fields and Jorden Burt to form a 370-lawyer firm with offices in 10 U.S. cities.