Bryan Cave released a firmwide strategic plan in 2015 that included a core pillar of “innovation.”
At internal meetings, the Am Law 100 firm stressed the importance of a 30-plus member team of technologists, pricing professionals and project managers that have helped Bryan Cave twice win the “Innovative Firm of the Year” award from the International Legal Technology Association.
In confirming this week its merger talks with U.K.-based Berwin Leighton Paisner, Bryan Cave appears to have found a trans-Atlantic partner that has proven it can change the law firm business model and has won a slew of its own industry innovation awards.
As BLP and Bryan Cave leaders seek to sell the proposed combination to their partners in the coming weeks, they will likely harp on that like-minded view of innovation, as well as practice groups and clients that overlap in real estate, litigation and corporate deals. The firms have said they will not comment on the merger until a vote occurs at a to-be-determined date.
Still, if the thinking of two former Bryan Cave partners is any indication, those in favor of the deal will have to overcome skepticism that the creation of a 1,500-lawyer global firm is simply a growth play.
“This ‘merge until you’re mega’ (strategy) will only ever work for a handful of firms,” said one individual, who requested anonymity in order to speak freely about internal matters. “And Bryan Cave is considerably down the list of candidates for which that play could pan out.”
There is some indication that the structure of a combined firm would be its own small slice of law firm business model innovation.
While most international firms are structured with split profit pools, often as Swiss vereins, the release announcing the BLP-Bryan Cave merger discussions states that a united firm would be one of only a handful operating in a “one-firm” structure. Some consultants believe law firms with a single profit pool create better incentives for lawyers to share clients across geographic regions, something stressed by Bryan Cave and BLP in their announcement.
On the shared clients front, BLP lists as a client American International Group Inc. Bryan Cave has a long history with AIG dating back to at least 2005 when former partner James Cole was appointed to oversee activities at the insurance giant as part of a deferred-prosecution agreement with federal authorities. Bryan Cave and Cole, now a leader of Sidley Austin’s white-collar group, reportedly received $20 million in fees from that long-running assignment.
Bryan Cave’s London office lists 37 lawyers who mostly handle corporate matters, ranging from a banking practice to private wealth services. BLP’s private wealth planning group has the coveted Band 1 status in a listing of London firms compiled by Chambers and Partners. BLP’s largest and best-known practice is its real estate group, which Chambers claims accounts for 32 percent of the firm’s lawyers.
A significant presence in Europe and the U.K. would potentially help Bryan Cave’s lawyers serve their domestic client base abroad. The firm’s roots are in St. Louis, where many of its large clients are headquartered, including agribusiness giant Monsanto Co., beverage behemoth Anheuser-Busch InBev NV, electric utility Emerson Electric Co. and batteries manufacturer Energizer Holdings Inc.
“Bryan Cave has decades of experience representing clients on a global basis,” said Aaron Williams, a St. Louis-based president of nationwide attorney search firm Aaron Consulting Inc. “I see this potential merger as a positive for both firms and their clients. … I do not see any downside to the merger, just a strengthening of service and attorney quality.”
But one former partner said he was skeptical that a merger with BLP would help the firm be seen as higher quality.
“Firms like Bryan Cave have a tendency to always merge with equals. So they tend to always get bigger and bigger,” the former partner said. “If a B-plus firm merges with a B-plus firm, it’s still a B-plus firm. The size doesn’t make it any better; it just gets bigger.”
Both Bryan Cave and BLP have had merger discussions run aground in recent years. Bryan Cave’s talks with now-defunct Dickstein Shapiro ended in late 2015 as the bulk of the latter struck a deal with Blank Rome.
BLP and Greenberg Traurig were in tie-up talks about a year-and-a-half ago. The failure of that merger was partially attributed to vastly different pay structures at each firm, with Greenberg Traurig operating under a “black box” model and BLP using a modified lockstep structure.
A Bryan Cave partner described the firm’s compensation system as “very subjective,” taking into account a number of types of credit. It also involves the firm’s practice economics group, which considers clients’ profitability and the total growth of a relationship, the partner said.
On the financial side, the firms have broadly similar profits per partner, with BLP posting profits per partner of £630,000 ($836,876) for 2016-17 and Bryan Cave having a similar figure of $865,000 (£655,584) for 2016.
On the innovation front, Bryan Cave’s technology push was largely started by former partner John Alber, who briefly left the firm in the 1980s to start and then sell a tech-based logistics firm. Alber helped structure the firm’s innovation initiative into a series of working groups that are focused on technology, the economics of law practice and an alternative-staffing model.
Since Alber retired more than a year ago, Kathryn DeBord has served as chief innovation officer, a role that last year saw her help launch a consulting service called BCXponent to help streamline law departments. The firm in 2011 won its first ILTA innovation award for its three-pronged approach to innovation. Bryan Cave won the top award again in 2014 for its “Rosetta” software, which converts a lawyers’ financial metrics into a narrative designed to help them practice more efficiently.
For its part, BLP was named in 2015 one of the 10 most innovative firms of the past decade by the Financial Times, which noted that its Lawyers on Demand service has been replicated by 30 percent of the top 20 law firms in the U.K. and had grown 700 percent during the previous five years. While some U.S. firms have changed their staffing models on certain projects, none have a business that would compare with Lawyers on Demand’s 600-plus staff attorneys.
One source said Bryan Cave’s business would be better served by boosting its “head start” in innovation rather than growing via merger.
“Perhaps even move in the other direction on scale—becoming smaller and more focused, and achieving efficiency by technical sophistication rather than mere numbers,” the source said. “That’s the real opportunity for a firm as creative as Bryan Cave.”
That will ultimately be up for the firm’s partners to decide.