Jonathan Blair, managing partner of Bond Dickinson, and Betty Temple, chair and CEO of Womble Carlyle Sandridge & Rice, now the co-leaders of Womble Bond Dickinson ()
As it makes its international debut, Womble Bond Dickinson is billing itself as a “new breed of transatlantic law firm” because it unites two middle-market firms with strong regional roots. After linking up as independent allies last year, Womble Carlyle Sandridge & Rice and U.K. firm Bond Dickinson said June 1 that they will formally combine.
“We provide that Main Street value,” said Womble’s chair and CEO, Elizabeth “Betty” Temple. She will co-chair the new firm’s global board from her offices in Atlanta and South Carolina, splitting leadership duties with Jonathan Blair, Bond Dickinson’s Newcastle-based managing partner.
“Our sweet spot is really the middle market,” Temple said. “There hasn’t been a combination like this before. Our big offices are not in New York or London.”
Temple said that, while the firm values its Fortune 500 clients, plenty of smaller, more regional companies have transatlantic operations these days. “Startup technology companies are global,” she said. “They’re doing it now, not when they get bigger.”
The deal helps Womble to serve clients that already have U.K. operations or are hoping to, Temple said, adding that the firms’ cultural compatibility clinched the deal.
Womble is the largest firm in North Carolina, headquartered in Winston-Salem and has grown to 14 offices on the East Coast, running from Atlanta north to Wilmington, Delaware, plus a Silicon Valley outpost.
Bond Dickinson was formed in 2013 from the combination of two regional U.K. firms—Bond Pearce, based in Bristol, and Dickinson Dees in Newcastle. Its other offices are in London, Leeds, Plymouth, Southhampton and Aberdeen.
When the combination takes effect in October, it will create a firm with more than 1,000 lawyers, including about 420 partners, with combined revenue of $415 million at the current exchange rate. The deal will give Womble a larger footprint in the U.K. than any other firm in the Am Law 200, Temple said, including DLA Piper and Eversheds Sutherland, with 580 Bond Dickenson lawyers in seven cities. “It catapults Womble from having no international offices to being a go-to firm in the U.K.”
“And we’re the only middle-market firm,” she said. “I don’t consider Eversheds Sutherland to be middle-market focused at all.”
Atlanta-based Sutherland Asbill & Brennan and U.K.-based Eversheds combined to form Eversheds Sutherland on Feb. 1, using the same structure, an English company limited by guarantee, that Womble Bond Dickinson will employ. That firm is much larger, however, with combined revenue of about $800 million and about 2,300 lawyers.
Urge to Merge
Other potential transatlantic mergers have sputtered, despite the promise of greater market share amid flat demand for legal services. Last year, Greenberg Traurig pulled out of talks with Berwin Leighton Paisner (No. 17 on the U.K. Top 50) over concerns about the London-based firm’s practice mix, culture and management. Hunton & Williams’s talks with another British firm, Addleshaw Goddard, fell through last August amid Brexit fears.
London-based Norton Rose Fulbright announced in February that it would merge with New York-based Chadbourne & Parke, following the Eversheds Sutherland tie-up. But that was far from a transatlantic merger of equals. Norton Rose, one of the world’s largest firms with offices globally, absorbed Chadbourne, which lost its name in the deal.
Midsize firms such as Womble and Bond Dickinson have faced particular pressures in recent years. While they lack the scale of firms further up the Am Law 200 or U.K. Top 50, they are also not as specialized and nimble as smaller firms, making it challenging to differentiate themselves in a competitive legal market.
The American Lawyer, an ALM affiliate of the Daily Report, reported last month that firms in the middle of the Am Law 200 rankings were getting squeezed on revenue and profit growth, a phenomenon it described as the “hollow middle.”
At No. 114 in the current Am Law 200 rankings, Womble found itself smack in the middle of the list. The combination with Bond Dickinson will vault the firm into the UK Top 20 and the Am Law 100 next year.
Womble reported $281 million in revenue last year, a 3.1 percent decline from the prior year, along with a 6.2 percent drop in head count to 465 lawyers.
Even so, the firm increased revenue per lawyer by 2.5 percent to $605,000 and increased profit per equity partner by 3.3 percent to $620,000—slightly ahead of the Second Hundred’s overall RPL and PPP increases.
Womble’s revenue is about double that of Bond Dickinson. The U.K. firm reported $134 million (104 million pounds) in 2015-2016 revenue, placing it at No. 39 in the Legal Week U.K. Top 50.
Womble has fewer lawyers—about 500, compared with Bond Dickinson’s 580. The weak British pound pushes down Bond Dickenson’s revenue to some extent, and its higher head count includes 30 trainee lawyers.
Womble’s RPL of $605,000 is also more than double Bond Dickenson’s RPL of $281,000 (218,500 pounds). Womble had 2016 PPP of $620,000, compared with Bond Dickinson’s $355,000 (275,000 pounds). That’s the converse of the Eversheds Sutherland deal, where Eversheds was by far the larger partner, with more than four times as many lawyers around the world and almost double the revenue.
Under the company limited by guarantee structure, Womble Bond Dickinson’s U.K. and U.S. branches are each subsidiaries that will continue to operate as autonomous partnerships with their own independent management and finances. Womble Bond Dickinson will have an eight-member global board with equal representation from each firm, led by Temple and Blair.
Temple, who became Womble’s chair in January 2016, is its first leader based outside of its Winston-Salem headquarters. She divides her time between Womble’s offices in Greenville, South Carolina, and Atlanta, one of its largest markets with 65 lawyers.
Atlanta has a big part to play in the combination, she said. Both Bond Dickinson and Womble have strong financial services practices, with a focus on the growing financial technology sector. “We’re really focused on the Atlanta-London connection with fintech,” she said, adding that Womble’s fintech group leader, Ted Claypoole, has just relocated to Atlanta from Charlotte.
Atlanta is the U.S. hub for the electronic payments processing industry, with Georgia payments companies grossing more than $30 billion annually. That has fostered a burgeoning fintech startup community. Charlotte, a regional banking hub, is another of Womble’s largest markets. Meanwhile, the U.K. fintech industry is centered in London and Leeds, both Bond Dickenson cities.
As a result of the client-sharing alliance that the firms established last June, Temple said, Womble landed U.S. securities work for Bond Dickenson fintech client Atom Bank, based in Durham, England. The online-only, app-based bank, which targets millennials, has raised $268 million since launching in April 2016, according to TechCrunch.
“It’s not Bank of America, but it’s fast-growing and successful,” Temple said.
The firms’ manufacturing, infrastructure and real estate practices also are complementary, she said, while Womble sees growth possibilities from Bond Dickinson’s strong energy practice, and the U.K. firm sees the same from Womble’s life sciences practice.
Temple declined to name other clients shared by the two firms for now. When the alliance was announced last year, she said Womble had more than 200 clients with U.K. operations.
“What I love about this is we’re staying focused locally on our communities and clients,” she said, since many Womble clients with U.K. interests are Southeastern companies.
Change of Plans
Last June Bond Dickinson’s Blair emphasized that the alliance, which established a formalized joint effort for pitching and expanding services to clients, wasn’t a precursor to a merger. “[P]utting in place something that leads to a merger is not the objective: the objective is to service the clients in the U.S. and the U.K.,” he said at the time.
“That’s all true. A merger was not the objective,” Temple said. But the alliance has been “very successful,” she said.
“We went through the process of working together, collaborating together to implement the alliance … across teams and industries. We discovered an enormous amount of cultural and practice similarities,” she said. “That’s what led to this.”
Tax and regulatory issues, Temple said, were a factor in the decision to use the company limited by guarantee structure, in which the U.K. and U.S. branches remain separate entities overseen by the global board.
While the two firms are keeping their finances separate, they will be sharing a lot of marketing and investment expenses as Womble Bond Dickinson.
“Now, to the outside world we have one name and are one firm,” Temple said.
Womble Bond Dickinson will be investing in talent, she said, but focusing on its existing locations in the U.S. and U.K., not by planting flags in additional countries..
Blair said in a statement that on his side of the Atlantic, “London remains a priority for investment, along with Edinburgh and other areas important to U.S. and U.K. clients.”
Temple said the U.S. focus is on Atlanta, Charlotte, Raleigh, Washington and Silicon Valley.
“We are committed to growing domestically and realizing the potentials of this combination,” Temple said. “But never say never is what I’ve learned.”
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