For Pennsylvania’s large law firms, 2013 was a year of office expansion and pseudo-mergers.

While Pennsylvania firms, with the exception of Woodcock Washburn, shied away from the large-scale mergers seen on the national stage, there were several acquisitions of smaller boutiques that sometimes weren’t full-on mergers but more akin to large lateral group hires.

But an even hotter trend than mini-mergers was the opening of new offices, which included national and international expansion. Southern Florida, the Silicon Valley and Houston were prime targets for growth within the United States in 2013.

In January, Duane Morris opened a Palo Alto office with a focus on intellectual property. In March, the firm went thousands of miles from its Philadelphia headquarters to open an Oman location through a joint venture with Al Mashaikhi and Partners Law Firm.

Duane Morris continued its international expansion in September with the launch of an office in Yangon, Myanmar. The firm became the first in the United States to create a foothold in Myanmar. It did so through its joint venture with Singapore-based Selvam LLC.

Reed Smith and K&L Gates each opened in Houston at the beginning of the year through lateral hires. K&L Gates started the office with one attorney and now has nearly 15 lawyers. Reed Smith, which was unable to find a merger partner in the city after several years of looking, decided to forgo its typical expansion strategy and open with 17 laterals from a variety of firms. It now has about 35 lawyers in the city.

Cozen O’Connor opened an office in West Palm Beach, Fla., in March with six partners from Edwards Wildman. Duane Morris also poached some attorneys from Edwards, adding to its Miami and Boca Raton, Fla., offices. Cozen O’Connor’s expansion didn’t stop in Florida. The firm opened a Minneapolis office in June with eight partners from Chicago-based Hinshaw & Culbertson.

Fox Rothschild undertook a number of expansion efforts in 2013. The firm opened a Coral Gables, Fla., office in April with a banking focus to start. In June, the firm added a five-member zoning and land use team in New York from Wachtel Masyr & Missry, which included two nonlawyer urban planners. The group focuses on real estate development work in New York City.

Later in June, Fox added to its relatively new Denver office with the acquisition of 16-lawyer Lottner Rubin Fishman Saul. Just last week the firm announced it would expand its San Francisco office in January with the acquisition of boutique firm MBV Law.

Morgan, Lewis & Bockius launched in Dubai in July with the addition of three attorneys from Vinson & Elkins. Later that month the firm added eight lawyers to its Moscow office from French firm Gide Loyrette Nouel.

This summer, Blank Rome closed its office in Hong Kong with intentions of funneling its work in Asia through its Shanghai office. Around the same time, the firm acquired the bulk of the lawyers from Houston-based maritime boutique Bell, Ryniker & Letourneau.

Buchanan Ingersoll & Rooney shuttered the doors to its Aventura, Fla., office in November, moving those attorneys to the firm’s Fort Lauderdale location. Also that month, Pepper Hamilton opened an office in the Silicon Valley with three intellectual property attorneys from Goodwin Procter.

Schnader Harrison Segal & Lewis formed an association with Jakarta, Indonesia, firm Yang & Co. in October and acquired all of the attorneys from Philadelphia boutique Trujillo, Rodriguez & Richards in July.

Ballard Spahr merged with noted white-collar defense boutique Stillman & Friedman in New York in July.

The largest merger in 2013 affecting a Pennsylvania law firm was that of intellectual property boutique Woodcock Washburn and 800-lawyer, Ohio-based Baker & Hostetler. The two firms confirmed in November that they had signed a letter of intent to combine in January 2014 pending partnership approval. The partners voted earlier this month to move ahead with the combination, now slated for Jan. 1.

Not all office openings were outside of Pennsylvania. New York-based construction law firm Peckar & Abramson launched a Devon, Pa., office with the hire of public-private partnership partner Frank M. Rapoport of McKenna Long & Aldridge.

Leadership

There were a number of leadership changes at Pennsylvania’s largest law firms this year.

Perhaps the most unexpected change was longtime Reed Smith managing partner Gregory B. Jordan stepping down after 12 years to serve as general counsel of client PNC Financial Services Group. Washington, D.C.-based partner Alexander “Sandy” Thomas, who most recently had led the firm’s litigation department, took over for Jordan as head of Reed Smith.

Morgan Lewis announced in October that longtime Chairman Francis Milone would be stepping down next year. Litigation department head Jami Wintz McKeon will take over as head of the firm.

The retirement due to health reasons of Philip Toran as chairman of Marshall Dennehey Warner Coleman & Goggin resulted in firm President Thomas Brophy stepping into the chairman position. Christopher Dougherty took over Toran’s role as director of the professional liability practice and joined the firm’s executive committee.

Louis Freeh, former FBI director and judge, was named chairman of Pepper Hamilton in February, less than six months after his firm merged with Pepper. Freeh took over for Chairwoman Nina Gussack.

Stephen Aichele, former chairman of Saul Ewing, rejoined the firm after stepping down in July as Gov. Tom Corbett’s chief of staff.

In October, Blank Rome named Alan Hoffman as the sole chairman of the firm, announcing his co-chairman, T. Michael Dyer, was retiring.

In March, Morgan Lewis hired away Latham & Watkins Chief Marketing Officer Despina Kartson to serve as CMO.

In June, Dechert hired consultant Chantel Moore as its firmwide director of diversity.

Business Trends

This year also brought with it the opportunity for the bulk of the state’s large law firms to re-evaluate their lease options. Whether they moved buildings or not, firms looked to reduce the amount of space they leased. Aside from a way to reduce costs, firms determined they didn’t need as much space given support staff numbers were shrinking.

Many firms have reduced their secretary-to-attorney ratio, with Blank Rome creating an associate resource center this year that uses secretarial pools for associates the firm found don’t typically utilize secretarial staff at the same frequency as more senior attorneys. As part of the firm’s move to reduce the number of secretaries, it offered buyouts to all of its secretarial staff.

After a few years of collecting financial data and applying project management techniques to the legal process, law firms began to dedicate resources to pricing analysis. Firms are analyzing and strategizing on pricing in order to properly staff matters handled on alternative fee arrangements, provide a client with more cost certainty and, perhaps just as important, ensure the firm is not losing money on a fee arrangement.

Cases Settled

There were two notable lawsuits against law firms that settled in 2013.

Francine Griesing’s $20 million putative class action lawsuit against her former firm, Greenberg Traurig, for gender discrimination settled for undisclosed terms in May.

Duane Morris settled a legal malpractice suit against it for an undisclosed amount, letting stand a Pennsylvania Superior Court ruling that legal malpractice damages in civil cases are not limited to the fees paid to an attorney.

The state Supreme Court had granted allocatur in Coleman v. Duane Morris in June, in an order limiting review to the issue of whether its 1993 ruling in Bailey v. Tucker limiting malpractice damages to fees paid to an attorney applies only in the criminal context or can be extended to civil cases. In November 2012, the Pennsylvania Superior Court ruled the limitation on legal malpractice damages to the fees paid to an attorney only applies in criminal cases, not civil.

Leaders Lost

This year brought with it the passing of some of the state’s current and former law firm leaders. Arthur Makadon, who stepped down as chairman of Ballard Spahr in 2011, died in July at the age of 70 after a very brief battle with lung cancer.

Fred Blume, the former managing partner and CEO of Blank Rome, died at 72 in April. Margolis Edelstein co-founder Alan Margolis died at the age of 78 in February. And White and Williams managing partner Guy Cellucci died unexpectedly last month at the age of 59.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI. •