As Fox Rothschild fills in another section of the East Coast with its latest merger, other large firms based in Pennsylvania are also thinking about the Southeast. But finding a match can be a major challenge.
Philadelphia-based Fox Rothschild finalized its biggest acquisition ever last week when the Am Law 100 firm gained about 125 lawyers in the Carolinas and Georgia from Smith Moore Leatherwood, and the firm is expanding in South Florida.
Fox Chairman Mark Silow said the latest deal has already resulted in new work, now that clients know the firm has an office in North Carolina, which had long been a geographic area of interest for the firm.
Consultant Tom Clay of Altman Weil said he knows at least a couple of Pennsylvania firms are looking to grow in Atlanta, but “there aren’t that many firms in Atlanta of chewable bite size anymore.” Likewise, he said, the Carolinas and Nashville remain interesting markets to large firms.
Pennsylvania-born firms that already have a Southeastern presence include K&L Gates, Dechert, Duane Morris, Cozen O’Connor, Buchanan Ingersoll & Rooney and Ballard Spahr.
Saul Ewing Arnstein & Lehr and Marshall Dennehey Warner Coleman & Goggin both have multiple offices in Florida but not elsewhere in the Southeast.
Michael Heller, CEO of Cozen O’Connor, said his firm’s Charlotte, North Carolina, office is smaller than he would like it to be. The firm has pursued opportunities in Atlanta and just opened an office in Richmond, Virginia. Additionally, he noted Cozen O’Connor is always seeking to grow in Miami.
“I think there are lots of opportunities in the Southeast, but we’re not targeting any cities where we don’t already have locations,” he said.
Law firms based in the Southeast also have been consolidating with one another, like Alabama-based Burr & Forman’s recently announced combination with South Carolina’s McNair Law Firm. And South Carolina-based Nelson Mullins expanded its reach in Florida this year by acquiring Miami’s Broad and Cassel.
Law firms in the Carolinas and Georgia have been hot targets for years.
According to data from Altman Weil MergerLine, which tracks law firm combinations, 24 law firms based in North Carolina or South Carolina and 14 based in Georgia were acquired from 2007 to 2016.
Those deals included some hefty mergers by Am Law 200 firms. K&L Gates and McGuireWoods both acquired North Carolina firms of well over 100 lawyers in 2008, and Williams Mullen acquired a midsize firm in North Carolina the year before.
In Georgia, Dentons and Eversheds Sutherland made major acquisitions in 2015 and 2016 as well as Bryan Cave in 2008.
G. Mark Thompson, CEO of Marshall Dennehey, said Atlanta is a top city of interest for the firm, while Charlotte is also on its radar. But the firm isn’t actively looking for a merger partner in either city, he said, and has no imminent plans to do so. Although he has spoken with some firms and recruiters in the area, he said.
A lot of self-insureds and insurance companies have offices or headquarters in Atlanta, Thompson said, making it an attractive market for the large insurance defense firm. Additionally, he noted Atlanta and Charlotte are both easily accessible to Philadelphia by flight, making a Southeast expansion more practical than, say, a West Coast expansion.
Ballard Spahr chairman Mark Stewart said his firm entered the Atlanta market because of a specific practice rather than geography. But it might be a good place to add lawyers if the right opportunity arose, he said.
“We don’t have designs on any other office in the Southeast, which is not to say we’d not be interested in adding resources in the Southeast,” Stewart said. “We’ve talked to some folks in the Southeast, we’ve talked to some firms in the Southeast, and it seems like a right place” to grow.