Neither firm would confirm that merger negotiations are taking place but two former Winstead lawyers and another lawyer with knowledge of the discussions verified the story, which was first reported on Tuesday by The Texas Lawbook.
David Dawson, chief executive officer and chairman of Winstead, said the firm does not comment on discussions with individual lawyers, groups of lawyers or other firms. He said Winstead is approached regularly by “a variety of firms, large and small, domestic, international, and we from time-to-time have reached out on our own” to explore opportunities.
In a written statement, Troutman Sanders said it is committed to strategically expanding its “geographic footprint” to meet client needs.
“That includes evaluating potential new U.S. and international offices, to the extent they help meet the goals under our strategic plan. Texas continues to be a market in which we are interested for these reasons,” the firm said.
The firm also said as a matter of policy, it does not comment on the specifics of its evaluation, including on attorneys, groups or firms.
In an interview in February with The Daily Report, Troutman Sanders managing partner Stephen Lewis said Texas is on the firm’s radar. “We are willing to go quickly if we find the right group, but we are willing to be patient, too,” he said at the time, noting that the firm also wants a group that is a good cultural fit and a good fit for its practice.
He also said many clients have urged the firm to open up shop in Texas.
Winstead and Troutman Sanders both posted improved financials in 2017.
Troutman, with 672 lawyers in 2017, posted gross revenue of $508.7 million for the year, up 3.8 percent when compared with 2016, with revenue per lawyer of $758,000 and profits per partner of $1.058 million. At 321-lawyer Winstead, gross revenue was $216.8 million for in 2017, up 1.5 percent from the year before, with revenue per lawyer at $675,000 and profits per partner at $1.177 million.
A merger would create a firm with almost 1,000 lawyers and gross revenue of $725 million.
If the talks result in a deal by the end of the year, it would be the fourth major firm merger involving a larger Texas firm this year. In April, Houston-based Andrews Kurth Kenyon merged with Hunton & Williams, forming Hunton Andrews Kurth; Gardere Wynne Sewell of Dallas merged with Foley & Lardner, forming Foley Gardere; and Dallas-based Strasburger & Price merged with Detroit’s Clark Hill, forming Clark Hill Strasburger.
Despite all the merger activity in Texas, combined with the influx of out-of-state firms opening offices in the Lone Star State and the rash of lateral moves, Winstead’s Dawson said the firm would not be driven to a deal solely because of what other firms choose to do.
“The firm is coming off its sixth record year of revenues. We are doing great. We have a super-regional law firm.” he said. “While based primarily in Texas, we have clients all over the country and are doing very well.”
Kent Zimmermann, a law firm consultant with Zeughauser Group in Chicago who is familiar with the Texas market but has not been hired by either Winstead or Troutman, said he is not surprised that another large Texas firm would be engaged in discussions given the dynamics of the Texas legal market.
Winstead has six offices in Texas and an office in Charlotte, North Carolina. Troutman has 12 offices in the United States, including one in Charlotte. Troutman also recently closed three offices in Asia.