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Merger and practice group acquisition announcements have been coming fast and furious from small and midsize law firms since the start of 2009. That’s not unusual at the end of a calendar year, as many firms wait until a new year to merge operations because it makes bookkeeping easier. But the recent tumble of the economy and the legal industry is adding a new dynamic to law firm mergers and practice group acquisitions, legal experts say. Namely, the cost savings that come along with merging operations and the opportunity to pick up practice areas that flourish during bad economic times may be prompting more firms to consider their options. Additionally, the collapse of several top firms in recent months means there is a significant amount of legal talent on the market. “I think this is all part of what is going on in the legal industry overall,” said Peter Giuliani, a consultant based in Connecticut who advises law firms on mergers, among other issues. “There certainly is a lot of consolidation going on, and there are no shortage of opportunities.” Still, preliminary results from Hildebrandt International‘s survey of law firm mergers in the fourth quarter of 2008 indicate that the number of combinations held fairly steady from the previous year, said Lisa Smith, a consultant with Hildebrandt. “It doesn’t seem to be extraordinary,” Smith said. ’08 PLANNING TAKES HOLD In the first week of 2009, at least five small and midsize firms have said they are merging or boosting their attorney ranks. New York-based Anderson Kill & Olick announced that it is merging with San Buenaventura, Calif.-based Wood & Bender. Both firms specialize in insurance recovery, and the merged firm will have nearly 100 attorneys. Denver-based Sherman & Howard announced it is merging with litigation boutique Netzorg McKeever Koclanes & Bernhardt, also based in Denver, as well as with Phoenix-based Mohr, Hackett, Pederson, Blakley & Randolph. The combination will bring Sherman & Howard’s attorney headcount more than 190. Newark, N.J.-based Sills Cummis & Gross is merging with New York-based Silverberg Stonehill Goldsmith & Haber. The nine additional attorneys from Silverberg Stonehill will expand Sills Cummis’ New York office. Columbia, S.C.-based Nexsen Pruet has scooped up Raleigh, N.C.-based Sanford Holshouser, while Portland, Ore.-based Miller Nash has added four attorneys from Newcomb, Sabin, Schwartz & Landsverk. “The things that are being announced now started off in talks back at the beginning of 2008,” Smith said. “We tend to see more mergers with a January 1st effective date, and many firms don’t announce their mergers until they are effective.” Merging has some obvious financial benefits. For one thing, the combination of two smaller firms means certain cost reductions. “There is a market synergy that will help both firms, but there are also economies of scale,” Giuliani said. “There are lots of infrastructure advantages in putting two firms together. There will be redundancies in the central administration. You only need one billing system or marketing director.” Eliminating those redundancies means lower costs for both firms, though cost savings are only one of many reasons firms may look to merge. Increasing profits, boosting the volume of business and balancing out clients and lawyer skills are all among the strategic reasons firms merge or add practice areas, wrote legal consultant Joel A. Rose in a December opinion piece in The Legal Intelligencer, an affiliate of The National Law Journal. Yet another factor in the recent merges and lateral hires is the demise of Heller Ehrman, Thelen and Thacher Proffitt & Wood, Smith said. “Clearly, one of the things that’s not business as usual is the dissolution of those firms,” she said. “That’s had a big impact.”

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