Leaders of the two firms declined to discuss the status of the merger negotiations, but rumors had been circulating in Dallas that talks had broken down and sources familiar with the discussions confirmed they had ended. Texas Lawbook also reported on Wednesday that the discussions were off.
Texas Lawyer first reported the two firms were engaged in merger discussions in June.
Sources speaking on the condition that they not be identified said the merger talks ended recently. Although the discussions had progressed beyond the preliminary stages, sources familiar with the discussions said they had not advanced enough to reach a partnership vote. Obstacles to the deal included law firm billing rates and the preferred client mix.
A Winstead/Troutman combination would have created a firm with almost 1,000 lawyers and gross revenue of $725 million.
David Dawson, chief executive officer and chairman of Winstead, declined to discuss the status of any merger talks, saying the firm’s policy “is to not comment on conversations with individual lawyers, groups of lawyers, or other firms.”
Stephen Lewis, managing partner of Troutman Sanders, also said Wednesday that the firm does not, as a matter of policy, comment on merger discussions. “We talk to partners, to groups, to firms in lots of markets on a regular basis,” he said. “That’s what firms do.”
In an interview in February with the Daily Report in Atlanta, Lewis did say that Texas is on the firm’s radar.
“We are willing to go quickly if we find the right group, but we are willing to be patient, too,” he said at the time, noting that the firm also wants a group that is a good cultural fit and a good fit for its practice.
He also said many clients have urged the firm to open up shop in Texas.
Texas has been a hotbed of big mergers this year, and sources said it would not be surprising if Winstead eventually links up with another firm. In April, Houston-based Andrews Kurth Kenyon merged with Hunton & Williams; Gardere Wynne Sewell of Dallas merged with Foley & Lardner; and Dallas-based Strasburger & Price merged with Detroit’s Clark Hill.
Both Winstead and Troutman posted improved financials in 2017, and revenue per lawyer and profits per partner were not far apart.
In 2017, Troutman, with 672 lawyers, posted gross revenue of $508.7 million for the year, up 3.8 percent when compared with 2016, with revenue per lawyer of $758,000 and profits per partner of close to $1.1 million. Winstead, with 321 lawyers, reported gross revenue of $216.8 million, up 1.5 percent from the year before, with revenue per lawyer at $675,000 and profits per partner at nearly $1.2 million.