After a spate of lateral departures following a tough financial year in 2013, Bingham McCutchen has reportedly sounded out several Am Law 100 firms about a potential union, which comes at a record-setting time for law firm mergers.
Reuters cited anonymous sources in breaking the news late last week that Boston-based Bingham had reached out to at least four Am Law 100 firms over the past three months, with two of those firms rejecting Bingham’s purported advances. The Wall Street Journal reported over the weekend that Bingham remains on the hunt for a merger partner.
“[Bingham] very much wants to make a deal,” one law firm consultant familiar with the firm’s situation told The Am Law Daily in an interview. “But I don’t think there are any talks that are gaining traction.”
Bingham itself has declined to comment on its tie-up talks, although the Boston Business Journal reported last week that newly elected managing partner Steven Browne had informed the firm’s partnership via email of its various discussions.
In response to questions from The Am Law Daily about its outlook, Bingham issued this statement: “We have engaged in talks with scores of firms during the past 20 years, some of which we have acted upon, most of which we have not. We are always open to exploring opportunities, and we continue to selectively screen and evaluate them as they are presented to us.
“As always, however, our clients come first and our focus remains on managing our business for long-term growth and success as well as for a strong 2014. We continue to improve on important financial metrics. Our financial performance is very strong, and we are on track to have a much better year than we did in 2013.”
According to the most recent Am Law 100 financial data, Bingham saw gross revenue dip 12.6 percent in 2013, to $762 million, while profits per partner dropped another 12.7 percent, to $1.475 million, and revenue per lawyer mostly held flat at $960,000. Bingham’s attorney head count plunged 11.7 percent in 2013 from 900 to roughly 795, according to an annual report by sibling publication The National Law Journal, a number that has continued to fall despite some recent partner-level hires.
As previously reported by The American Lawyer, Bingham itself has been the product of a series of combinations over the past 20 years, such as its absorption of McKee Nelson five years ago this month. In 2011 Harvard Law School published a study titled “Bingham McCutchen: Combinatorial Mathematics,” which chronicled the firm’s rapid rise through the Am Law 100 ranks after the election of chairman Jay Zimmerman in 1994.
But in May, Bingham said Zimmerman would hand over day-to-day management of the firm to Browne as of June 1. The change came on the heels of a series of lateral partner departures from the firm in the five months after it posted its worst-ever decline in annual profitability, as recently noted in a feature story by The American Lawyer.
The two firms identified by Reuters as recently being approached by Bingham are Morgan, Lewis & Bockius and Winston & Strawn, both of which have made a bit of a habit in recent years of poaching from rivals before they went bust.
A spokeswoman for 822-lawyer Winston declined The Am Law Daily’s request for comment about its reported interest in a deal with Bingham. In early 2012, Winston brought on more than 60 lawyers from now-defunct Dewey & LeBoeuf, a move that came a little more than two years after Winston opened a Houston office with 40 lawyers from Howrey, which also went belly-up. (Former Howrey chairman Robert Ruyak subsequently joined Winston.)
As for Morgan Lewis, the 1,363-lawyer firm’s chairwoman-elect Jami Wintz McKeon declined to comment about a potential deal with Bingham. McKeon is also no stranger to helping her firm digest the remnants of others, having spent several years in California as Morgan Lewis sought to integrate 50 lawyers from now-defunct Brobeck, Phleger & Harrison. Morgan Lewis also added offices in Moscow and Almaty in 2012 after hiring 65 former Dewey lawyers.
Boston-based legal consultant Jeff Coburn, who admits to having no personal knowledge about Bingham’s merger prospects, says that Morgan Lewis could be an ideal fit. Coburn notes that the two firms share certain synergies in geography—Boston and Philadelphia, the latter the home base of Morgan Lewis, both have similar strengths in the life sciences and pharmaceutical industries—and Morgan Lewis’ relatively small Boston outpost could benefit from Bingham’s largesse.
Sidley Austin is one firm that has hired large groups of laterals from Bingham over the past year, most recently picking up a four-partner real estate and commercial litigation team last month in Washington, D.C. Reached by The Am Law Daily on Monday, Carter Phillips, the Beltway-based chair of Sidley’s executive committee, pointed to the larger issues plaguing the legal services industry when talking about Bingham.
“All of us hope that every large firm, especially Bingham, will make it through these difficult times,” Phillips says. “All of us have the fear that there, but for the grace of God, go I.”
Indeed, U.K. publication Legal Week reported Monday that London-based legal giant Ashurst had sounded out Sidley for a potential merger last year as the former pushed forward with its acquisition of Australia’s Blake Dawson. Ashurst previously held merger talks with Latham & Watkins and Fried, Frank, Harris, Shriver & Jacobson more than a decade ago.
Senior writer Julie Triedman and Gina Passarella, a senior staff reporter and special projects editor with sibling publication The Legal Intelligencer, contributed to this report.