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The merger between Boston-based Ropes & Gray and New York IP boutique Fish & Neave appears to be flourishing 18 months later. Revenue in 2005 was up 38 percent to $558 million, the biggest percentage gain posted by any Am Law 100 firm. And if the indicator of a successful merger were retention, you’d have to say the match was made in heaven. So far, only one of Fish & Neave’s 160 lawyers has left for another firm since the merger was announced. “I think we’ve done very, very well,” said Managing Partner John Montgomery. “The object of the merger is to combine the strength of the two firms in order to produce a platform that was even stronger. It is important to us that one plus one equals three. And I think that’s what we’ve achieved.” Montgomery said the combined 722-lawyer firm has so far exceeded all expectations. Not only has firm management kept the usual post-merger attrition at bay, it’s brought in new clients attracted to the firm’s combined corporate/private equity and IP practice. In January 2005, immediately after the merger, Medtronic Inc., a Minnesota-based medical device company, hired the firm to negotiate a $1.35 billion patent settlement that involved a buyout of 200 U.S. patents and 500 foreign patents. And early this year, the firm represented private equity consortiums Bain, Carlyle, Lee and Thomas H. Lee Partners in the $2.5 billion leveraged buyout of the Dunkin’ Donuts, Baskin-Robbins and Togo’s chains. The deal involved about $1.6 billion in intellectual property, primarily trademarks. In both matters, private equity and corporate attorneys who’d been with Ropes & Gray before the merger handled the corporate part of the deal, while lawyers with Fish & Neave pedigrees handled the IP-related issues. The firm also recently got on the short list of outside counsel that pharmaceutical giant Schering-Plough will be using in the coming year, according to Montgomery. “Schering was looking to reduce the number of counsel that they rely on, and at the end of the process we were chosen because of our combined strength in corporate and IP,” Montgomery said.
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IP consultant Katherine Patterson, of Patterson Davis Consulting in San Francisco, said it is apparent that the merger has been successful so far. But it is still too soon to tell whether things will go as smoothly as it’s gone so far. “There’s a lot of win-win here,” Patterson said. “If you look at it from many different angles, you see the compatibilities and the synergies. But they’re just beginning to scratch the surface.” The synergy is apparent in the Bay Area where prior to the merger, Fish & Neave had a 23-lawyer office in Palo Alto, and Ropes & Gray had a nine-lawyer San Francisco outpost. The combined lawyer count for the two offices went from 32 to 46 in less than a year. The count includes such high-profile lateral hires as Geoffrey Leonard and Scott Elliott, corporate partners at Orrick, Herrington & Sutcliffe in San Francisco, and former Wilson Sonsini Goodrich & Rosati partners Brian Erb and Eric Wright. And this fall, five additional associates will bring the California headcount to 51. The West Coast expansion is a clear indication of how well things are going post-merger, says San Francisco Managing Partner John Chesley. Separately, both firms’ Bay Area outposts had a difficult time attracting lawyers, even from their own offices around the country. But now that doesn’t seem to be a problem anymore. “The firm merger has really put us on the map in terms of recruiting law students and lateral hires,” Chesley said. Ropes & Gray’s high visibility, he noted, was even apparent during this year’s summer associates recruitment at Boalt Hall. “Fully 50 percent of the second-year class at Boalt signed up to be interviewed on campus last fall for summer associate positions with Ropes. The year before, we had only a handful sign up,” Chesley said. Mark Rowland, managing partner at Ropes & Gray’s Fish & Neave IP group in Palo Alto, echoed Chesley’s observation. He said his group now attracts a larger and more talented pool of lawyers and law students. “The [Fish & Neave] office was started with partners all of whom came from the East Coast, and we have a national practice,” Rowland said. “Now we’re seeing an increase in local DNA and we’re now starting to develop a different type of client relationship. These people grew up in the area so they have a natural relationship with local clients. We can now expand into the related areas that are unique to California.” SMOOTH SAILING Law firm consultants measure the success of a merger based on physical and cultural integration, low attrition (less than 5 percent is considered a benchmark), client retention and acquisition of new clients whom lawyers from both firms serve. Based on those measures, the Ropes & Gray combination is considered an unqualified success. So how did they pull it off? For the most part, the merger worked because of a combination of careful planning and pure luck. Rowland said that for Fish & Neave the key to the success was open and continuous communication with partners, associates and staff. “My biggest concern was maintaining a sense of security at all levels of the office,” he said. “I always felt for the people who were not directly involved in management. Those are the people for whom the merger creates the greatest anxiety, and I wanted to make sure they had the sense of security.” The handholding paid off, he said, when the whole firm stood solidly behind the merger decision. Fish & Neave also adjusted its compensation structure to match Ropes & Gray’s prior to the merger, which avoided creating a potential divide after the merger. Both firms also took time to get to know each other personally and professionally while conducting merger talks off and on over a period of years. The result was that there were few surprises after the mergers because potential conflicts had already been addressed. PLAYING NICELY TOGETHER Before the merger, Ropes & Gray had a 40-lawyer IP practice that mostly concentrated on high-end patent prosecution and counseling. Fish & Neave, on the other hand, had almost 70 percent IP litigation work. Also, Ropes & Gray’s health-care focus and regulatory practice were great complements to Fish & Neave’s biotech and life science groups. “The merger had a lot going for it because we didn’t have many conflicts in our practices,” Rowland said. “And it was with some luck that our cultures matched as well.” Chesley said meeting with the Palo Alto attorneys was like “finding a lost sibling.” “We have really wonderful people in both offices, and I was very concerned about creating and sustaining that culture that would support people practicing at a high level,” Chesley said. To integrate the two offices, Chesley organized bus trips so the personnel could get to know each other and find out about each other’s work. The firm is also integrating the systems of both offices. A regional administrator who will oversee the whole West Coast operations starts next month. In New York, Ropes & Gray plans to combine its two offices in one building, 1211 Rockefeller Center. The new location will house 210 lawyers from both offices. “I want things to go smoothly for everyone,” Chesley said. “Little irritants like bounced e-mail or a voicemail system not working can be the last straw for some attorneys. All of these people have a lot of options and any one of them can walk out the door. I want the firm to be a compelling alternative for high-caliber talents.” The fact that Ropes & Gray partners also unanimously decided to keep Fish & Neave’s brand name created a lot of goodwill among the partners of the IP firm, said former Fish & Neave Chairman Jesse Jenner. “I can foresee the day when we’ll be known as Ropes & Gray, but in the near term we think the Fish & Neave brand still has a lot of value and we’re glad that we’ve kept it,” Jenner said. CAN THE HONEYMOON LAST? To continue on the right track, Patterson said, both firms should really get to know each other’s practice even more and be creative and flexible in selling each other’s strengths and expertise to clients. One IP recruiter, who didn’t want to be identified, said Ropes & Gray will not be immune from the heated competition among firms for clients and talent, and it is too soon to tell whether they can keep all of the IP talent Fish & Neave brought in. “The window for possible partner attrition is at least 24 months,” the recruiter said. Law firm consultant Ed Wesemann, a principal at Edge International in Savannah, Ga., said most law firm mergers end up being successful in terms of raising revenues. But the key issue is sustaining the firm’s growth and continuing to take full advantage of the benefits the merger brought. “The analogy to marriage is a very good one,” said Wesemann, who is familiar with both firms but was not involved in the merger. “I’ve been married 39 years and there are days I feel like we’re not going to make it to 40. But Ropes & Gray is a well-managed and very well-thought-out firm. I’ll be shocked if they are not going to manage this merger right.” Chesley, however, is not taking any chances. “I know it is not by chance that we are successful and it is by no means permanent,” he said, “so we have to keep working at it.”

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