Matters such as associate pay, partnership tracks and compensation formulas will not change for Fulbright & Jaworski lawyers with the June 1, 2013, combination with Norton Rose, says Kenneth Stewart of Dallas, chairman-elect of Fulbright’s executive committee. The two firms announced an agreement on Nov. 14 to combine Houston-based Fulbright and London-based Norton Rose into Norton Rose Fulbright. The combined firm will have about 3,800 lawyers in 55 cities worldwide.
“From a local governance standpoint, and particularly the standpoint of associates and partners coming in, and partner promotions, compensation within our own group is focused on a local basis,” Stewart says.
Fulbright’s current partners-in-charge also will remain in place, he says. “The leadership structure in the U.S. organization will stay pretty much as it is,” he says.
Compensation arrangements will be the same because the combined law firm will be structured as a Swiss verein, an organization under Swiss law in which member entities, such as Fulbright, maintain financial independence.
Peter Martyr, chief executive of Norton Rose, will be the global chief executive of the combined firm. Stewart will serve as managing partner of the new firm’s U.S. operations and will hold a senior position on Norton Rose Fulbright’s global executive committee.
“We’re going to have proportional representation of the different members,” said Norman Steinberg, global chairman of Norton Rose, during a Nov. 14 press conference.
In addition to Fulbright, members of the Norton Rose Fulbright Swiss verein include firms in Australia, Canada and South Africa.
Regarding the Swiss verein structure, Steinberg said, “It means basically that we avoid the tax issues of a full financial merger.”
Steinberg said the annual gross revenue of the combined firms will approach $2 billion.
Fulbright’s gross revenue for 2011 was $597.5 million, according to Texas Lawyer‘s Annual Report on Firm Finance, published in April 2012.
Joining with Fulbright gives Norton Rose a strong presence in the United States, Martyr said during the press conference. “Obviously, we’ve had a longtime ambition to be in the states,” Martyr said. “We can’t be a global law firm without being in the states.”
Martyr explained the new moniker. “We wanted to capture the strength of both names,” Martyr said. “It was very important to Norton Rose to gain a very well-known name in the states to be recognized immediately in the states.”
It was important for Fulbright to have more global resources, says Steven Pfeiffer, chairman of Fulbright’s executive committee. “More and more of our clients were expanding overseas, making new investments overseas, and asking what we could do for them in the former Soviet Republic, the Middle East, Asia and Africa,” he says.
Pfeiffer says the client lists of the two firms overlap but declines to name the clients, identifying them only as large banks and major oil, pharmaceutical and insurance companies.
About 800 of Fulbright’s lawyers are in the firm’s U.S. offices, which will continue to operate as the domestic offices of Norton Rose Fulbright. The domestic locations include four offices in Texas — Austin, Dallas, Houston and San Antonio — as well as offices in Canonsburg, Pa., Denver, Los Angeles, Minneapolis, New York, St. Louis and Washington, D.C. There are five international cities where both firms currently have locations, and they will be combined into one office in each city.
The combined firm improves business prospects for all of its lawyers, Stewart says. U.S.-based lawyers will be able to offer clients expertise around the world, and clients from around the world will turn to the firm’s U.S. lawyers for U.S. matters, Stewart says.
“There will be a lot more and different kinds of transactions, cross-border transactions, and more matters for lawyers to work on,” he says. Stronger, deeper client relationships will result in “hopefully more work for all of us,” Stewart says.
Profits per partner at Fulbright averaged $800,000 in 2011, down 8.7 percent from $876,000 the previous year, according to Texas Lawyer‘s Annual Report on Firm Finance, published in April 2012 and 2011, respectively. Revenue per lawyer at the firm averaged $738,000 in 2011, a 0.7 percent decrease from $743,000 in 2010.
Stewart takes over as chairman of Fulbright’s executive committee on Jan. 1, replacing Pfeiffer, who is stepping down after serving in the position for 10 years. Fulbright requires partners to step down from management positions in the year that they turn 65, which Pfeiffer did this year.
Discussing the combination of the two firms, Pfeiffer says, “I wish I was 10 years younger. This is going to be fun and will serve our clients extremely well.”
When asked about not including Jaworski, the name of Fulbright founder Leon Jaworski, in the new firm’s name, Stewart says that, in recent years, Fulbright has become known in the industry simply as Fulbright.
“Jaworski is an icon in the legal profession in the U.S.,” Stewart says. “He will always be a core part of our firm.”