Thank you for sharing!

Your article was successfully shared with the contacts you provided.
After months of speculation, Philadelphia-based Drinker Biddle & Reath and Chicago-based Gardner Carton & Douglas have confirmed to The Legal that the two firms will merge. The firms began merger discussions in March, according to Drinker Biddle Chairman Alfred W. Putnam Jr., and have held several meetings since then. The Gardner Carton partnership voted two weeks ago to approve the merger, with Drinker Biddle partners following suit last week. Putnam said the Drinker Biddle partnership voted yes to the merger by “a number substantially in excess” of what the firm’s partnership agreement requires. Gardner Carton Chairman Harold L. Kaplan said his partnership “overwhelmingly” supported the merger as well. The combination will take effect on Jan. 1, 2007, creating a firm with 651 lawyers and 26 other professionals across 12 offices. The firm will maintain the Drinker Biddle name, except for its offices in Illinois and Wisconsin, where it will be known as Drinker Biddle Gardner Carton until 2008. Putnam will maintain his position as chairman, but he said there would be room made on the management committee for Gardner Carton attorneys. The committee and partnership structures of the two firms are very similar, Drinker Biddle Managing Partner Andrew C. Kassner said. According to Putnam, Gardner Carton has a number of limited equity partners with about 60 equity partners in all. He said no one at Gardner Carton would change his or her status as part of joining Drinker Biddle. “One of the things that has been very compelling is the examples we’ve seen from prior combinations [completed by Drinker Biddle],” Gardner Carton vice chairman Edwin A. Getz said in terms of how the acquired firm is given representation in management roles. Recruiter Mark Jungers of the Midwestern offices of Major Lindsey & Africa said the merger is a bit anticlimactic after hearing rumors of a possible combination for some time. “The fact that it took as long as it did tells me that, just with all of the other large-ish mergers like this, the people in the middle…need to be convinced,” he said. Kassner said Drinker Biddle has been focused on growing the business side of its practice, and Gardner Carton will help with that in the areas of intellectual property, corporate work, real estate and investment management. Gardner Carton is also known for its health care and human resources practices, he said. Both Kassner and Kaplan are bankruptcy lawyers, and Kassner said the firm would now have offices in three of the five biggest markets for bankruptcy filings: New York, Delaware and Chicago. The other two areas, he said, are Texas and California. Kassner said Gardner Carton’s health care practice could also benefit from a larger presence on the East Coast where there are several pharmaceutical companies. Michael Coleman of Coleman Legal Search said Gardner Carton is a “great name” in the Chicago and national legal markets. He said this acquisition further solidifies Drinker Biddle as a national firm. While some could have argued that the firm’s California offices were too small to make Drinker a true national firm, Coleman said no one could dispute the firm’s national presence now. Putnam said a larger Chicago presence would help the firm’s national litigation group, particularly in the products liability sector, which is currently headquartered out of the firm’s 5-attorney Chicago office. Drinker Biddle opened an office in the Windy City in 2005 with the addition of two partners from Kelley Drye & Warren and moved to five attorneys in about a year and a half. Some of the firm’s clients in Chicago include insurers, investment and financial services companies and national pharmaceutical companies, Kassner said. Drinker Biddle partner John Dames has headed up the firm’s products liability practice and the Chicago office. Putnam said Dames would maintain leadership of the products liability group. As the two firms continue the integration process over the next year and beyond, Putnam said it might become apparent that a reorganization of practice groups makes sense. Kassner said the combined firm would have a number of practice areas that will have between 80 to 100 attorneys and will need to be managed in the most efficient way possible. Conflicts were not a major issue in this deal, Putnam said, adding that while every deal may result in unavoidable conflicts for some of the attorneys, he does not anticipate many attorneys being forced to leave over them. While Putnam said it was certainly easier to grow through a larger-scale merger, Kassner said the firm does not approach growth with a need for a merger. He said the practice areas of Gardner Carton and Drinker Biddle just fit so nicely, as do the firms’ financial structures. In looking at the 2005 financial figures of each firm as listed in the AmLaw 100 and 200 rankings, the firms would have a combined gross revenue of about $350 million. The firms have very similar revenues per lawyer (RPL) and profits per equity partner (PPP), which Kassner said would make for an easier transition. Gardner Carton fell from the 151st spot on the AmLaw 200 to 163rd for its financial performance in 2005. The firm showed 226 lawyers with 41 equity partners. Getz said the firm currently has slightly fewer than 200 lawyers in its four offices. The firm ended 2005 with $127 million in gross revenue, $560,000 in RPL and $560,000 in PPP. Drinker Biddle finished out 2005 with $223 million in gross revenue, dropping the firm four spots on the AmLaw 100 to 96th place despite increases in all of its key financial indicators. The firm’s RPL for 2005 was $550,000 and its PPP was $575,000. Drinker Biddle’s fiscal year ends Jan. 31, a month later than Gardner Carton. Both firms will begin their next fiscal year on February 1, 2007, Putnam said. While some in the industry have questioned the health of Gardner Carton, pointing to the need for a merger if the firm were to survive, Getz would not go so far as to confirm that view. He said Gardner Carton has traditionally been a “stand alone” firm in which it looked to grow organically. About a year ago, he said, the firm began to look more seriously at other growth options. The conclusion was that a merger with Drinker Biddle was the best choice, he said. Gardner Carton has seen some attrition over the past few years, according to some familiar with the firm, including the loss of former partner Steven Loren who has since been indicted on fraud charges related to his representation of a firm client. Putnam said Drinker Biddle had some of its litigation partners look into the cases against Loren. “We don’t think they really pose a substantial risk to Gardner Carton,” he said of the cases. Kaplan said the last several years have been focused on growing certain practice areas and integrating that growth. This past year was spent looking for merger opportunities, he said. Jungers said the merger makes perfect sense for Gardner Carton. He said it made perfect sense for the firm two years ago as well, when it was healthier than it is now. The deal will make sense for Drinker Biddle, Jungers said, depending on the work remaining with the Gardner Carton attorneys. Looking for a merger partner that is a “grand-slam homerun” in terms of financial stability and depth and breadth can make for a very limited pool of potential candidates, Coleman said. “Everyone should take a lesson from Reed Smith,” he said, in reference to its merger with California-based Crosby Heafey Roach & May in 2003. Coleman said there were questions about Crosby Heafey’s financial health before the merger, and many other firms passed it up. Reed Smith found a way to make it work, he said. “That successful transition was the starting point of Reed Smith’s meteoric growth,” Coleman said. “I applaud Drinker if there’s a parallel between Gardner and Crosby.” Jungers said he doesn’t see Drinker Biddle’s increased presence in the Chicago marketplace as a change to the legal landscape there. He said the large Chicago firms would tend to look more closely at firms like Paul Hastings entering the market. The firm, ranked 23rd on the AmLaw 100, has expressed an interest in opening up shop in Chicago. Once Drinker Biddle and Gardner Carton complete the deal, the combined firm will have offices in Philadelphia, Chicago, Washington, D.C., Florham Park and Princeton, N.J., San Francisco and Los Angeles, Calif., Berwyn, Pa., Milwaukee, Wis., New York and Albany, N.Y. and Wilmington, Del. Drinker Biddle partners will move into the office space that houses the 150 Gardner Carton attorneys in Chicago. The Gardner Carton attorneys in Washington, D.C. will move into Drinker Biddle’s office there. A subsidiary of Gardner Carton that focuses on information technology consulting for its healthcare clients will now become a subsidiary of Drinker Biddle, Getz said. Putnam said the firm does not have in its strategic plan a need to penetrate any other specific market. He said he wants to help grow national practices and respond to the needs of clients. As clients cut back on their list of outside firms, Putnam said he wants to be a firm that can do everything for the client in order to stay on the list. Some of Gardner Carton’s clients include Wal-Mart, JP Morgan Chase, Illinois Tool Works, Motorola and the University of Illinois. Drinker Biddle has on its client roster the University of Pennsylvania, Hewlett Packard, Comcast, General Electric, GlaxoSmithKline, Johnson & Johnson and JP Morgan & Co. Drinker Biddle is the second Pennsylvania firm in the last few months whose partnership voted for a merger with a Chicago-based firm. Reed Smith announced in October that it was set to merge, pending a partnership vote, with 140-attorney Sachnoff & Weaver after spending a few years shopping around in the market. Gina Passarella is a reporter for The Legal Intelligencer, the ALM publication where this article first appeared.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.