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Greenberg Peden is the latest midsize Texas firm to bite the dust this year, joining the ranks of familiar names like Sheinfeld, Maley & Kay and Clark, West, Keller, Butler & Ellis in bowing to trends that make it tougher for the small to survive. The demise of Greenberg Peden comes just a few months after the lawyers began considering a proposal from a large national firm interested in acquiring the 17-lawyer, 31-year-old firm. “That got us to think about what we were doing,” says founding shareholder Roger Greenberg. “Some of us were not interested in being acquired by a large institution. The long and short of it … is groups decided to go to different firms based upon their own desire.” Greenberg says it will be several to many months before the firm formally dissolves, but many of the lawyers, including shareholder David Peden, have already joined other firms. Greenberg and shareholder Harlan “Skip” Naylor will wind down the firm’s operations. Peden and four others, shareholders Allison Snyder and Denise Nestel and associates Brad Whitus and William B. “Ben” Westcott, joined Houston’s Porter & Hedges on Oct. 1. Michael Lee joined Beirne, Maynard & Parsons of Houston as a partner, also on Oct. 1. Associate Gregory Hudson will make the move to that litigation-only firm on Oct. 15, with Paul Gregory, who joins as of counsel. In other moves, Ronald Tigner has joined the Houston office of Preis, Kraft & Roy, a firm based in Lafayette, La., as a partner. Naylor is now vice president and general counsel for Benchmark Research & Technology. Ironically, Greenberg says, no one is joining the large national firm that initially approached the firm. Greenberg says he’s considering a number of offers but is concentrating on wrapping up Greenberg Peden’s affairs. Greenberg, who concedes he’s one of the lawyers at the firm who wasn’t in favor of merging with a jumbo-sized firm, says his options include joining a small or midsize firm, or even starting a new small firm. Greenberg Peden once had an Austin office and a dozen years ago had an oral agreement to merge with a large Washington, D.C., firm, but later backed off that deal. ECONOMIC PRESSURES Greenberg says the moves that led to the firm’s demise began in April, when the firm contacted a headhunter for assistance in attracting some corporate lawyers to the firm. He says the firm interviewed some corporate lawyers, but before anything happened on that front, the headhunter called back with news that a large firm already in Houston was interested in acquiring the firm. Greenberg won’t identify the large firm. With that offer in the works, it became clear some of the lawyers at the firm were interested in moving to a large firm, and others weren’t. At that point, Greenberg says, he decided to contact Porter & Hedges and Beirne Maynard to see if either of those firms were interested in acting as a “white knight.” “I said, ‘This calls for leadership,’ ” Greenberg says. “ It calls for looking at alternatives that may satisfy everybody.” However, Greenberg Peden’s practice areas didn’t fully mix with either firm, Greenberg says, so they couldn’t strike a deal for the entire firm to make the move to either Porter & Hedges or Beirne Maynard. Martin Beirne, managing partner of Beirne Maynard, says his litigation-only firm would have looked seriously at all Greenberg Peden’s trial lawyers. William Porter, managing partner of Porter & Hedges, says that to his knowledge, the talks with his firm related only to the construction litigation group. Lawyers at Greenberg Peden did commercial litigation, construction litigation, corporate, real estate and banking, estates and probate, insurance practice and employment law. Peden, who joined Greenberg Peden 27 years ago, right out of law school, says he and the other lawyers in his group doing construction litigation decided to join Porter & Hedges because they needed the support of a larger firm. Peden says they brought a number of clients including Teal Construction, Horizon Offshore Contractors and Benchmark Research & Technology, all of Houston. “I’m looking forward to getting a deeper bench, and a longer bench,” Peden says. Porter says the group “muscles up” the firm’s construction litigation group and boosts the lawyer count to 80. Lee says he decided to move to Beirne Maynard because he does commercial litigation. “I just think it’s time to be in a litigation-only firm and not try to get in a full-service law firm that’s undersized in this market at this time,” he says. Naylor says he had been doing some soul-searching about his career for a while and is glad to have the opportunity to work without keeping track of his time. He’s not completely surprised that the firm, despite its long life, didn’t survive current economic pressures on small and midsize firms that try to be full service. “Our cost structure is not unlike the big boys, but our fee structure and the client base hardly supports that,” says Naylor, who was the firm’s managing director for the past two years. STIFF COMPETITION Greenberg Peden isn’t alone in finding it harder to compete in a market that’s under consolidation. Clark West, a 17-lawyer firm in Dallas that traced its origin back to 1886, dissolved earlier this year after referral business started to decline and merger talks with a number of firms went nowhere. Also, Houston-based Sheinfeld Maley closed its doors in July after groups of lawyers from the firm, which numbered about 60 lawyers in the spring, started moving to other firms and corporate legal departments. “There will be more,” says firm consultant William C. Cobb of Houston. He says the market conditions are making it tougher for midsize firms to compete because not only do they have to keep up with the salaries that large firms pay their associates, but they also go head-to-head against full-service firms for business. “If you are that size, you can’t afford to be everything to everyone … and you don’t have the depth to haul in big clients, or keep the big clients,” he says. Small firms need to find a niche, Cobb says, acknowledging it’s sometimes easier said than done. “Part of it’s the fact that people tend to want to practice the same way they have practiced for 20 or 30 years. They like it,” he says. “They like a practice like that, but the competition is so stiff for work, and you are going to lose clients.”

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