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Andrews & Kurth and Mayor, Day, Caldwell & Keeton have agreed to merge, creating a 335-lawyer firm with offices in eight cities in the largest-ever merger of two Houston firms. Partners in both firms have approved the deal, which is expected to be complete well before the end of the year. The agreement in principle between 230-lawyer Andrews & Kurth and 105-lawyer Mayor, Day, Caldwell & Keeton comes three months after a group of nine public law/public finance lawyers from Mayor Day joined Andrews & Kurth in Houston. Additionally, up to 15 Mayor Day lawyers plus the firm’s summer clerks have been working out of Andrews & Kurth offices in Houston since June 9, but only because flood waters caused severe damage to the Bank of America Center, where Mayor Day has offices downtown. That building remained closed as of press time on June 21. Jonathan Day, managing partner of Mayor Day, says the merger makes sense because the firms’ cultures and finances are compatible, and combining the practices will provide opportunities for cross-selling to clients. “It’s going to give Andrews & Kurth some tremendous clout on their business side. Mayor Day has some great business lawyers and litigators, too,” says Houston consultant William Cobb. “Culturally they are going to fit nicely.” The 99-year-old Andrews & Kurth has offices in Houston, Dallas, Austin, The Woodlands (north of Houston), Washington, D.C., New York, Los Angeles and London. Mayor Day’s only outpost is in Austin. The firm will be known by both names in Houston and Austin for an indefinite time period. The merger allows both firms to plug holes in their practice offerings. Day says Mayor Day has ERISA/retirement lawyers, which Andrews & Kurth needs. On the flip side, he says, Mayor Day lost its income tax expertise earlier in 2001, and Andrews & Kurth has tax lawyers. The merger also gives Mayor Day’s bankruptcy lawyers the opportunity to join Andrews & Kurth’s nationally recognized bankruptcy practice, he says. “The list goes on and on,” Day says. The combination gives Mayor Day a presence in Dallas, where it doesn’t have an office, and provides Andrews & Kurth firepower in Austin, where it has a two-lawyer office, and Mayor Day has a dozen lawyers. The combined firm will have a critical mass of more than 200 lawyers in Houston, but the location of that office is undetermined because neither firm’s office is large enough. Revenue per lawyer at Andrews & Kurth was $517,000 in 2000, and $484,000 at Mayor Day, according to Texas Lawyer‘s Annual Report on Firm Finance. While the revenue per lawyer figures were fairly close, profits per partner were $560,000 at Andrews & Kurth in 2000 and $417,000 at Mayor Day. Day says his firm’s profits were affected by a large investment in a contingent-fee case. Howard Ayers, managing partner of Andrews & Kurth, says he first approached Day about three or four years ago to discuss a merger. “It always seemed to Andrews & Kurth that both firms were so compatible in a cultural and economic sense,” Ayers says. DONE DEAL It wasn’t until March that Ayers and Day seriously started talks about merging the firm. Other partners in the firms were involved in the talks as well, including David Runnels and Robert Jewell from Andrews & Kurth, and Richard Caldwell, Michael Connelly and Geoffrey Walker from Mayor Day. But the talks took time, Day says, and the firms’ practice groups even met to identify client and practice opportunities. Andrews & Kurth’s clients include Enron Corp., El Paso Energy Corp., G.E. Capital Corp. and Wal-Mart Stores, while Mayor Day represents Maxxam, Apache Corp., Lyondell Chemical Co., Kaiser Aluminum and KCS Energy. Gene Locke, one of the Mayor Day lawyers who moved to Andrews & Kurth in March, says he’s pleased the firms will merge and says it will provide greater opportunities and flexibility for lawyers in both firms. “I have been a proponent of the merger since I first had discussions with Andrews & Kurth before coming over here,” says Locke. Locke says the deal bringing the public finance group to Andrews & Kurth paved the way for serious merger negotiations between the firms. Ayers says he and Day have spent dozens of hours working on the deal. Day says the flooding that has temporarily forced his firm out of its office didn’t slow down the deal because they had essentially come to terms before tropical storm Allison hit Houston. Partners in both firms voted on June 18 to approve the deal. Ayers and Day say a number of details need to be worked out before the deal is complete, but they say none, including a small number of client conflicts, will stop it. Ayers says they would like to close the deal by the end of the third quarter. He and Day will jointly manage the firm, and the new firm’s major committees will be comprised proportionally of lawyers from both firms. Mayor Day is a 1982 spin-off from Butler & Binion.

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