Two of the largest firms in Alabama and South Carolina are joining forces to create a new regional Southeastern giant.
The deal will expand McNair’s footprint beyond the Carolinas, where it has 84 lawyers located in six offices in its home state of South Carolina and an outpost in Charlotte, North Carolina.
For Burr & Forman, which has been aggressively expanding beyond its Alabama base, the acquisition fills in a key puzzle piece on the Southeastern map—the Carolinas. Burr has about 280 lawyers in Alabama, Florida, Atlanta and Nashville, plus outposts in Jackson, Mississippi; Wilmington, Delaware and Raleigh, North Carolina.
Burr’s partners approved the tie-up on Tuesday, and McNair’s partners followed on Wednesday.
“Over the past two years we have been getting a lot of internal push from many of our partners who thought they had opportunities with existing and potential new clients in South Carolina and North Carolina so they were urging management to look hard at a push into the Carolinas,” said Burr CEO Ed Christian.
McNair’s CEO and managing shareholder, David Tigges, said the firm needed to expand beyond South Carolina to stay competitive. “For McNair, this is driven in large measure so we could better serve our clients—particularly our larger clients. We needed a deeper bench in key practice areas. Some of our clients are growing significantly and we need to keep up with that,” Tigges said.
“Strategically, looking into future, we need more size so that we can be on the approved counsel list for many larger corporations and financial institutions,” he added.
With McNair’s addition, Burr will have annual revenue of about $190 million, Christian said. Burr reported $147 million in revenue for 2017, which ranked it at No. 167 on The American Lawyer’s Am Law 200 list of the nation’s highest-grossing law firms.
Southeast Is Crowded
The South Carolina legal market has been growing increasingly crowded.
McNair, founded almost 50 years ago by former South Carolina governor Robert McNair (who died in 2007 at age 83) is one of the largest general practice firms in the state, along with three other big Columbia-based firms: Nexsen Pruet, Haynsworth Sinkler Boyd and Nelson Mullins Riley & Scarborough. The latter has been rapidly expanding into a super-regional Southeastern firm—and beyond—most recently with the Aug. 1 acquisition of Florida’s Broad and Cassel.
Meanwhile, plenty of regional and national firms have been planting their own flags in South Carolina, including K&L Gates, Gordon Rees Scully Mansukhani, Parker Poe Adams & Bernstein, and Adams and Reese.
“There have been a lot of regional to national firms entering South Carolina in the last decade, which is part of the strategic reason for the merger,” Tigges said.
McNair will lose its name in the acquisition but will still be known as Burr Forman McNair in South Carolina for the next two years. “McNair has a brand that is well-known and strong in South Carolina, so it’s beneficial to use that name for a period of time until people get used to hearing Burr,” Christian said.
Christian said he first called Tigges last spring to gauge McNair’s interest. They met in person in May, which both said went well, and started seriously looking at combining their firms by June. “We thought it was a good cultural and financial fit,” Christian said.
The two law firm leaders said due diligence over the past few months revealed no major client conflicts and has turned up more synergies. Tigges said McNair has already gained revenue from Burr referrals.
“We kept finding some connection in South Carolina that affirmed this was a good move,” Christian added.
Besides financial institutions, there is significant overlap in key industries for both firms, their leaders said, such as health care, automotive and manufacturing, economic development and hospitality.
“We represent several of the same financial institutions, but they represent more,” Tigges said. McNair will become approved counsel for two big lenders that it is not able to serve now when the merger takes effect on Jan. 1, he added: Synovus Financial Corp. and Regions Bank.
“So it’s a significant opportunity for us,” Tigges said.
Similarly, McNair represents two of the largest health care providers in South Carolina, Prisma Health and the Medical University of South Carolina in Charleston, Tigges said, while Burr represents UAB, one of Alabama’s largest health care providers.
“The health care industry is one of fastest growing areas in country, so combining [our capabilities] serves large clients very well,” Tigges added.
The related economic development and automotive industries also are strengths for the two firms. Burr represents Mercedes-Benz USA, which has a major manufacturing plant in Alabama, while parent company Daimler has opened a new Mercedes-Benz Vans plant in North Charleston. Meanwhile, McNair represents numerous suppliers to auto-makers.
Christian said McNair has long-established public finance and government relations practices, while Burr doesn’t. “We are very excited to have them. We think it’s great to have these additive practices,” he said.
Burr has been steadily expanding beyond its Alabama base for a number of years. About 120 of its 280 lawyers are still concentrated in its Birmingham headquarters, but Christian noted that the Birmingham lawyer head count has stayed constant over the past decade.
Growth instead has come from Burr’s moves to contiguous states, plus Wilmington, Delaware, Christian said, where it recruited two partners from Reed Smith in 2016 to start a bankruptcy practice. “That’s been a nice move for us,” he said.
Burr established its first office outside of Alabama in Atlanta almost 25 years ago to follow a major client, SouthTrust Bank, then headquartered in Birmingham and which later merged with Wachovia . The firm has about 40 lawyers in Atlanta now.
Burr’s expansion into Nashville and Florida also has been client-driven, Christian said—for instance, following SouthTrust to Orlando.
“Our expansion is driven by client need. That’s certainly what we see here,” Christian said of the move into the Carolinas.
Christian and Tigges, who both handle corporate and tax matters, will keep up their practices to a degree while running the firm, and most importantly, Tigges said, they will maintain their client relationships.
Tigges will join Burr’s executive committee, which currently has 11 members, making it an even dozen.