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Bingham Dana’s sleek conference room in its Manhattan offices just won’t cut it anymore. When the Boston-based law firm welcomed members of the newly acquired 75-attorney Richards & O’Neil with a celebratory luncheon last month, “We couldn’t seat everybody,” said Jay Zimmerman, Bingham Dana’s managing partner. Such are the woes at one of the nation’s fastest-growing law firms, which has doubled in size to 500 lawyers in just six years by acquiring firms specializing in bankruptcy, Asia and New York real estate, among other niches. Nor has Zimmerman just acquired firms. He’s also recruited top lawyers in various practice areas. Donald K. Stern, former U.S. Attorney for the District of Massachusetts, arrived Monday at Bingham Dana’s Boston offices. In July 1999, Zimmerman brought on international bankruptcy expert Richard Gitlin, and the rest of his Hartford, Conn., practice. That coup helped him achieve another: Former Chief Judge of the Southern District of New York Bankruptcy Court Tina Brozman, who knew Gitlin from the days when she presided over the bankruptcy and estate of late British media mogul Robert Maxwell, also joined the firm. What has been Zimmerman’s great lure? “In Bingham Dana, we found an entrepreneurial spirit,” says Brian D. Beglin, a member of the former Richards & O’Neil’s executive committee and a new Bingham Dana partner. At the heart of Zimmerman’s strategy is a desire to make his medium-sized law firm into one that is more competitive with larger rivals. He’s not alone in that desire. Bingham Dana’s growth spurt epitomizes the current consolidation sweeping the world of U.S. law firms. “Size does matter in today’s environment,” Zimmerman says. And “we’ve made it clear to headhunters, consultants and other lawyers that we have a substantial appetite in this [New York] market.” In fact, eat or be eaten may be the only way to survive as a law firm nowadays. Consider these statistics from Somerset, N.J.-based legal consulting company Hildebrandt International Inc., which found law firm mergers continued at record levels in 2000. There were a total of 75 mergers, up 47 percent from 51 mergers in 1999 and up 167 percent from the 28 the year before. This year the pace of law firm mergers appears to be even higher, with 35 deals announced as of June 1, says Lisa R. Smith, who heads Hildebrandt’s mergers and consolidations group out of Washington, D.C. “This year there does seem to be quite a bit of activity,” she says. Why? “In large part it is coming from the client and the consolidation in the business world that creates a demand for deeper and more sophisticated services,” Smith says. Moreover, “very high quality firms that haven’t considered mergers in the past are now considering them.” Recent marriages include those between Pillsbury Madison & Sutro and Winthrop Stimson, now Pillsbury Winthrop, and Troutman Sanders’ merger with Mays & Valentine. And in early May, in a deal on which Hildebrandt advised, Chicago’s Sidley & Austin joined forces with New York’s Brown & Wood to become a 1,325-lawyer firm known as Sidley Austin Brown & Wood. (Hildebrandt actually introduced the two firms to each other after working with them independently.) Sidley is blending its practices in mergers, litigation and regulatory work with Brown & Wood’s focus on financial institutions. In New York last year, Paul, Hastings, Janofsky & Walker absorbed 160-lawyer Battle Fowler. In January, Atlanta-based Alston & Bird snapped up the significantly smaller New York firm of Walter, Conston, Alexander & Green to get its Manhattan location and international practice that includes client Bertelsmann AG. In addition, the partners at the Atlanta firm wanted to be closer to its own Manhattan clients, including American Express Co., Bank of New York Co. and Fortis Inc. The enlarged entity with nearly 600 lawyers is now known as Alston & Bird. Elsewhere, 145-attorney Arnold White & Duke of Houston merged with Howrey & Simon to become Howrey Simon Arnold & White, while Philadelphia’s Blank Rome Comisky & McCauley united with New York-based Tenzer Greenblatt. The New York office will be known as Blank Rome Tenzer Greenblatt through 2002 and Blank Rome’s other offices will continue under the name Blank Rome Comisky & McCauley. And Piper Marbury Rudnick & Wolfe, Baltimore’s largest law firm, is in merger discussions with McCutcheon, Doyle, Brown & Enersen of San Francisco. If that deal closes, the combined firm would have 1,150 lawyers. Such activity isn’t out of the blue, either. “Three-quarters of the firms out there have considered this,” Smith says. For Bingham Dana, now comparatively midsized at about 500 lawyers, acquiring other firms and hiring new partners over the last few years reflect the strategy of Zimmerman, a tall, slender 46-year-old originally from St. Louis. He has concentrated on building up the firm’s New York presence and diversifying its client base and practice areas. That plan may be paying off. Besides Gitlin and Brozman, the firm has picked up several other bankruptcy practitioners while Chapter 11 filings are coming in bunches. In fact, it’s boom times for restructuring lawyers. Through May 11, some 80 public companies with pre-petition assets of more than $70 billion have filed for Chapter 11, according to Boston-based BankruptcyData.com. For the same period in 2000, 64 public companies with assets just north of $30 billion filed. Overall, the administrative office for the federal court system has recorded more than 3,000 businesses filing for bankruptcy this year. At Bingham Dana, the financial restructuring group has grown to 75 lawyers from 30 since 1999. They handle its roster of companies in need of billion-dollar debt makeovers. Among the firm’s clients are New York-based telecommunications network builder, Viatel Inc., which recently filed for Chapter 11 in Wilmington, Del., and Owens Corning, which is in bankruptcy in the U.S. but wants to keep its units in other countries out of that process. Then there’s the litigation practice of Richards & O’Neil. It’s one that Bingham Dana knew well; while serving as regional counsel to a company in the class action litigation regarding the controversial diet drug Fen-Phen, the smaller Richards & O’Neil was national counsel to another one. Aware of its allure, Richards & O’Neil had been “very jealous of [its] independence,” says Beglin, the former executive committee member there. Certain realities, however, gradually made the firm rethink that stance. “We found that it was increasingly difficult to maintain a high level of practice with a smaller group,” he says. The clients of Richards & O’Neil were growing geographically and by product line. Such growth expanded their legal needs, too. Client demands for more service dovetailed with an upsurge in M&A proposals. “We and other midsize firms regularly received offers from other firms to become their New York office,” Beglin says. Finally, two years ago, he notes, “we began to think the unthinkable.” Richards & O’Neil last year seriously began considering a merger. The firm eliminated law firms that wanted the New York address but didn’t have a clear strategy on what it hoped to do after establishing the beachhead. Bingham Dana provided a greater depth of services, especially in the transactional area, for clients of Richards & O’Neil, Beglin says. Part of the attraction was Bingham Dana’s position as the largest debt financing practice in New England. Among the firm’s clients in the secured and unsecured lending area are Fleet National Bank, State Street Bank, General Electric Capital Corp., Soci�t� G�n�rale, HSBC Securities and many others. In fact, about 6,000 new business and litigation clients came with Richards & O’Neil in the deal, says Bingham Dana’s spokesman, Hank Shafran. And it’s not just more specialization in litigation that Bingham Dana has gained. The real estate business of Richards & O’Neil is of particular value to Bingham Dana, since it includes as clients the Museum of Modern Art and its $600 million expansion project; a variety of construction contracts for Tishman Speyer Properties, which owns Rockefeller Center and the Chrysler building; and the joint venture investors in Trump International Hotel & Tower. “We have significant practices in Boston, Hartford and Washington [D.C.],” Shafran said of Bingham Dana’s real estate division. “New York was a big hole for us. This puts us with a very strong real estate capability on the eastern seaboard right now.” The clients of Richards & O’Neil have been contacted about the merger and told the larger firm could offer greater services, Shafran says. Zimmerman adds: “It’s got to be seamless for the clients.” Ironically, real estate is probably the biggest hurdle in the integration of the firms. Bingham Dana just doesn’t have enough space. Three weeks ago, the corporate department of Richards & O’Neil moved one block to Bingham Dana’s New York offices at 399 Park Ave. At the same time, Bingham Dana’s New York litigators moved to the old digs of the newly acquired firm on Third Avenue. By the end of this year, the firms will be blended into one location, where Bingham Dana is now. The firm will take up five floors, an increase from the two it occupied only a couple of years ago. Small but minor problems have come up, Zimmerman says. For example, the Richards & O’Neil folks are finding out that the number seven on the telephone voice-mail system doesn’t repeat the caller’s message. “We told them, ‘Beware of seven; it deletes messages on our system,’ ” Zimmerman says with a laugh. The new firm is a testament to Zimmerman’s vision. Before being elevated to the top spot at this old-line Boston firm in 1994, Zimmerman had been a partner running the firm’s London office for seven years. He had a unique perspective: The office’s focus was on British receivers with American assets who wanted to avoid bankruptcy in the U.S. “My predecessor was 54 years old, and out of the blue in February [1994] he said he was going to retire,” Zimmerman says of Joseph F. Hunt, who ran Bingham Dana for five years. It wasn’t a thriving period for law firms. Many were feeling the effects of the recession and responded by hiring fewer new lawyers. And typical of many firms, Bingham Dana had no succession plan. Zimmerman’s election to the top spot marked a generational shift, he says. He had just turned 40 and commuted between London and Boston for the first seven months as managing partner, which was difficult for his wife and two children. That wasn’t the only challenge. Zimmerman felt he had inherited a firm that wasn’t as diversified as it could have been. It was too dependent on its main client — Bank of Boston Corp. (now Fleet) — for which it has served as outside counsel. So he went to the other partners in the firm and convinced them that Bingham Dana had to diversify. While the firm did grow organically by starting a private equity legal practice, Zimmerman’s strategy called for acquisitions. For example, the bid to become more established in the New York City market came in October 1997, when Bingham Dana acquired the Japanese practice of Marks & Murase. “That was relatively easy,” Zimmerman recalls. “It was a discrete practice group. That coincided with the opening of the New York office in their space.” Gaining the expertise of individuals and practice groups was just the beginning. Bingham Dana had to export its own culture. “There was a little pain in the early days,” Zimmerman says, noting that Marks & Murase had to change from using WordPerfect to Microsoft Word over one weekend. The billing system was also changed. “Our view was to make it one firm.” It was a merger done with a lot of help from consultants. Yet, two years later, Bingham Dana had become such an experienced acquirer that it did much of the work on its own when it acquired the 55 lawyers of Hebb & Gitlin and name partner Richard Gitlin in July 1999. Gitlin proved instrumental in bringing Brozman to Bingham Dana. They met years earlier, when she presided over the bankruptcy and estate of late British media mogul, Robert Maxwell, former owner of the New York Daily News. Brozman appointed Gitlin as head of the creditors committee on the recommendation of the U.S. trustee. That high-profile Maxwell case “threatened to turn into jurisdictional warfare between the professionals in the United States and the United Kingdom,” Brozman recalls. “I didn’t want that to happen.” She gave up some control, although 80 percent of the assets were in the U.S., and American jobs were at stake. She allowed Gitlin to fashion a novel “protocol memo of understanding.” She said the company “itself was not thrilled. It wanted a traditional U.S. Chapter 11 bankruptcy.” Instead, the Maxwell estate got Gitlin’s plan that was approved both in the U.S. and the U.K. The reorganization plan was confirmed in 16 months and the case became a blueprint for how to proceed in transnational bankruptcies. It also cemented the friendship between Gitlin and Brozman. When the two bumped into each other again at a New York cocktail party shortly after Gitlin joined Bingham Dana, he returned the favor. Gitlin told Brozman that if she ever wanted to leave the bench, she should come to the firm. Saying she “loved judging,” she had been reappointed to a second, 14-year term in March 1999. But the offer from Bingham Dana was the first she seriously considered, she says. She decided to make the move in January 2000 and is a partner in the firm’s global financial restructuring practice in Bingham Dana’s New York office. “Believe it or not, I did not interview with a single other firm,” she says. Copyright (c)2001 TDD, LLC. All rights reserved.

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