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Plaintiffs’ firms Sheller, Ludwig & Badey of Philadelphia and Schmidt, Ronca & Kramer of Harrisburg, Pa., announced last week that they would take cooperation between law firms to a new level by signing what they have termed an affiliation agreement. Under the agreement, the firms will pool their resources, office space and talent but avoid the risks a traditional merger would bring. Sheller Ludwig founder and managing partner Stephen A. Sheller said this new organization, whereby the firms would retain their names and principal places of business yet enjoy each other’s expertise, offices and client bases, has enabled the parties to sidestep some common merger pitfalls. Among them Sheller identified what he called musical chairs — one firm hiring a group of attorneys from another firm and then watching the group begin to splinter and bounce from firm to firm. Sheller also said the firms had dodged the major expense that would be associated with a merger as well as the difficulties that come with taking on additional employees. And Schmidt Ronca partner James R. Ronca said eschewing a merger meant avoiding the difficulty inherent in meshing firm compensation schemes. Combining compensation arrangements can create internal nightmares for firms, even causing breakups, the attorney said. Sheller Ludwig associate Jamie L. Sheller, along with Ronca and Stephen Sheller, joked that the new arrangement is akin to a marriage — one with a prenuptial, that is. The three attorneys said their firms enjoyed a lengthy engagement because they had worked closely together over the years. “We get along well together, and we’ve learned each other’s idiosyncrasies,” Stephen Sheller said. He described the now-formal working arrangement as a natural fit for the betterment of both firms. Ronca said the firms often join forces for a given piece of litigation, taking advantage of each other’s experience and resources. He said that in drug and drug device cases, for example, it’s difficult for a five-attorney firm from Harrisburg to be an effective player in Philadelphia. That’s when Schmidt Ronca would turn to Sheller Ludwig, adding 18 lawyers and a home base to the effort. The firms have now chosen to affiliate on more than one case at a time, he said. According to Ronca, his firm is known for its motor vehicle and truck collision litigation expertise as well as its experience in related insurance issues. The firm also handles medical malpractice, construction site accidents, and drug and drug device matters. And while some of its practice areas overlap with its new affiliate, Sheller Ludwig brings expertise in complex product defects litigation to the table and is able to take on consumer class action matters that Schmidt Ronca would otherwise be hard-pressed to handle. In addition, Sheller Ludwig boasts a labor union practice that is national in scope. According to Ronca, the firms first teamed up for breast implant litigation centered in Philadelphia. Like subsequent projects that have received the firms’ joint attention, the breast implant matter required Ronca’s frequent presence in the city. But, he said, he was without a home office. Now, Ronca will not only have a home base at his disposal, but he also will have the support staff and expertise of Sheller Ludwig’s attorneys. Similarly, Stephen Sheller said that when his firm represents labor unions in central Pennsylvania, it will be able to provide improved service to its clients by maintaining a local presence and offering increased availability. And when Sheller Ludwig has major litigation in central Pennsylvania, or even in eastern Pennsylvania, in a Schmidt Ronca area of expertise, those lawyers will attend briefings and handle arguments on the matter, Sheller said. Essentially, he said, which firm will handle a given case is going to depend on location, expertise in the practice area and familiarity with the local courts. For example, Schmidt Ronca and Sheller Ludwig are working on an anti-cholesterol drug case based in Philadelphia: Ronca is in charge of the matter for both firms, but because the litigation is centered in Philadelphia, Sheller Ludwig attorneys are working with him on the case. Ronca said the affiliation agreement, crafted with the help of an attorney specializing in legal ethics, affords the parties considerable discretion since they enjoy a trusting relationship. Spelling everything out case by case was unnecessary, he said. According to Ronca, he and Jamie Sheller developed the outlines of the affiliation plan with assistance from Stephen Sheller. Because the firms wanted to avoid a partnership or a merger and wanted to simply work together on certain matters, drawing up an agreement was not a simple task. They needed a written agreement that would address malpractice insurance and possible ethics questions, Ronca said. Therefore, an ethics specialist was called upon to clear a path for the two firms. Ultimately, the specialist determined that calling the arrangement an affiliation would accomplish the firms’ goals, Ronca said. The firms have since linked their computer systems, though the communication only goes one way at the moment because of snags caused by different operating platforms. And Ronca now maintains an office in Philadelphia, heading into the city weekly rather than ad hoc as he had previously. Sheller said Ronca would be particularly valuable in light of his ability to advise on truck collision and insurance issues. And Ronca, whose practice consists mostly of referrals from other attorneys, said he hoped to shake his Harrisburg lawyer persona and pick up referrals in Philadelphia since he now has resources in the city. According to Sheller, additional benefits will be Ronca’s and Jamie Sheller’s ability to trade off on attending national and state trial lawyers’ association meetings and the benefits derived from backing differing political parties.

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