When leaders at 75-lawyer Rocky Mountain firm Rothgerber Johnson & Lyons began scouting around last year for a merger partner, they didn't look in bigger legal markets like California, New York, Texas, and Chicago.
Instead, the 110-year-old firm scoured the Southwest and Midwest—regions that Rothgerber chairman Frederick Baumann says his colleagues "felt more of an affinity" with—and came up with a short list of firms to approach. Among them: 180-lawyer Lewis and Roca in Phoenix. Talks between the two developed over the next nine months and Tuesday, partners at both firms voted to join forces effective September 1.
The merged firm, to be known as Lewis Roca Rothgerber, will have approximately 250 attorneys in nine offices spread across Arizona, California, Colorado, Nevada, New Mexico, and Wyoming.
"We've been around for a long, long time and have watched a number of our fellow firms in this part of the world become part of a larger organization," says Baumann, who joined Rothgerber in 1982 after moving to Denver from New York. And until now, "we’ve always taken a pass."
That attitude changed a year and a half ago, Baumann says, when the firm began consulting with professional services advisers at Catapult Growth Partners about how the firm should grow and opted to expand through a merger.
After combining, Baumann will serve as chair of the firm's nine-person executive committee, with Lewis and Roca's current head, Kenneth Van Winkle, running the firm's operations as managing partner.
Creating a unified partnership should be relatively straightforward, Van Winkle says, because the two firms "mirror" one another. Both have two-tier partnerships with a minority of income partners, open partnerships that make information easy to come by, and similar approaches to doling out compensation. Neither the 71 Lewis and Roca partners with equity status nor the Rothgerber 36 partners with the same designation will be de-equitized, Van Winkle says, and no staff layoffs are expected.
Major practice areas at the combined firm will include banking, insurance, real estate, intellectual property, gaming, and work for religious institutions.
Lewis and Roca, whose clients include Prudential Insurance Co. of America, Wells Fargo, and U.S. Airways, has been shrinking gradually over the past few years. In 2009 the firm debuted on The American Lawyer's Am Law 200 as the 194th highest-grossing firm in the country, with 207 lawyers and $105 million in revenue for fiscal 2008. By the fiscal year 2011, the firm's revenue had fallen to $90 million, and last year, its numbers declined to the point that it didn't qualify for the list.
Van Winkle says Lewis and Roca, like other firms in the Southwest, was hit hard by the economic downturn. Since conducting a round of staff and associate layoffs in early 2009, the firm has adjusted its numbers through attrition, he says, while also engaging in some expansion, including launching a Silicon Valley office in 2009 with hires from White & Case: "Since (the downturn), we’ve worked hard to adapt the firm to make sure we can provide the services to our clients by the right people, in the right practice areas and with the value we expect."
Lewis and Roca expanded once before through a merger, with a 2007 combination that involved a smaller firm, 34-lawyer Nevada shop Beckley Singleton.
Both Denver and Phoenix have seen multiple law firm mergers in recent years. In January, Detroit-based Dickinson Wright combined with 60-lawyer Phoenix firm Mariscal, Weeks, McIntyre & Friedlander, a move that local recruiter Phyllis Hawkins told The Am Law Daily at the time exemplified a trend toward firms based in the Midwest, rather than those in larger markets, showing interest in Arizona.
Last year's mergers or mass hires in the Colorado market included Lathrop & Gage acquiring seven-lawyer Denver intellectual property boutique Greenlee Sullivan; Stinson Morrison launching in Denver with the the addition of a 12-person team from Colorado firm Jones & Keller; and Bryan Cave absorbing 175-lawyer Holme Roberts & Owen.
As The Am Law Daily reported earlier this month, legal consultancy Altman Weil's latest report on the law firm merger market indicated that 2013 could see a record number of such tie-ups.