For some law firms, becoming bigger, which comes with a promise of additional practice offerings, more locales, and a higher ranking on The Am Law 100, remains a goal. This in part explains the continued popularity of law firm mergers, the surest and fastest way to zoom up our gross revenue chart. Sixty firm mergers were announced in 2011, according to the consulting firm Altman Weil, Inc.—a 54 percent increase from 2010 and the highest number since 2008.
A year ago, Atlanta’s Kilpatrick Stockton and San Francisco’s Townsend and Townsend and Crew were on our Second Hundred list—Townsend at 170 and Kilpatrick in a tie at 114. But the combined Kilpatrick Townsend & Stockton, the result of a merger between the firms that became effective in January 2011, makes its Am Law 100 debut at number 78 with gross revenue of $362 million.
Three other entities on this year’s list are the result of combinations that affected their ranks. Edwards Wildman Palmer, which was the result of a merger between Boston’s Edwards Angell Palmer & Dodge and Chicago’s Wildman, Harrold, Allen & Dixon, ranks eightieth on this year’s Am Law 100. Squire, Sanders & Dempsey combined with the U.K.’s Hammonds in a verein that placed number 35 on our gross revenue rankings. Another verein, SNR Denton, debuts at number 37; it is the result of the combination of Sonnenschein Nath & Rosenthal with Denton Wilde Sapte.
Firm leaders contend that their mergers and combinations provide strategic advantages, not just heft. “The value of this merger is that it really gave both legacy firms the growth they were looking for,” says Kilpatrick Townsend chair William Dorris. “Kilpatrick gained a strong IP practice and more presence in the West, while Townsend got a more national footprint along with a more broad-based litigation and transactional practice.”
But mergers can also mean the end of an era for firms that have rich local identities and histories. For example, Townsend traced its roots in San Francisco back to 1860 and had built a name for itself handling IP and antitrust matters for such iconic California companies such as Apple Inc. and Levi Strauss & Co. “If firms hold themselves back because of history or traditions, they risk being less competitive,” says Jason Yuen, a legal recruiter at Los Angeles–based Yuen Partners. “Firms have to focus on the future. They have to ask themselves: How do we improve next year’s revenues?”
Five months into 2012, The Am Law 200 has already seen mergers that will affect next year’s rankings—including those of Faegre & Benson with Baker & Daniels; Bryan Cave with Holme Roberts & Owen; and McKenna Long & Aldridge with Luce Forward Hamilton & Scripps. Like Townsend, Luce Forward has deep California roots: It was founded in San Diego in 1873 and drafted the city’s first charter in 1889. The McKenna Long–Luce Forward merger, which took effect in March, makes San Diego, the nation’s eighth-largest city, one of the biggest U.S. cities that is not headquarters to an Am Law 200 firm.