Reed Smith said it will acquire 55 attorneys from 120-attorney Anderson Kill & Olick, effective Feb. 1.
The rest of the attorneys will continue to operate under the Anderson Kill banner.
It was reported in The Legal two weeks ago that Reed Smith was rumored to be in merger discussions with Anderson Kill, but the firm would only confirm it was interested in growing in New York.
That goal seems to be accomplished, with 43 of the 55 attorneys joining Reed Smith’s New York office.
The attorneys, including several members of Anderson Kill’s executive management team, will join Reed Smith’s offices in Philadelphia, Chicago or New York. Two shareholders will join the Philadelphia office as partners, along with seven associates.
Of the 55 attorneys joining the firm, 25 will join as partners, three as counsel and 27 as associates.
Anderson Kill is now disputing how many attorneys are making the move.
Robert Horkovich, executive committee member and chairman of the firm’s insurance recovery group, told The Legal‘s sister paper, the New York Law Journal, 45 attorneys, including 24 shareholders, two of counsel and 18 associates had informed the firm of their impending departure.
Horkovich said yesterday that 15 attorneys from the insurance recovery practice were expected to depart, leaving Anderson Kill with 60 attorneys in its core practice area.
Later in the day, Jerry Doyle, a member of Anderson Kill’s communications team, said he could not confirm those figures. He said that the number of departing attorneys was “fluid,” but added that at least two-thirds of the firm’s lawyers planned to stay.
The firm said in a statement that 43 of Anderson Kill’s 69 shareholders would remain at the firm.
For an interim period, the New York attorneys moving to Reed Smith from Anderson Kill will remain on one floor of Anderson Kill’s Avenue of the Americas office, which Reed Smith will sublease. When Reed Smith is done building out its current space, the group will officially switch offices.
Reed Smith said in a statement it would gain additional expertise in the insurance recovery practice as well as bankruptcy and commercial litigation. The firm said it would also gain a larger creditor-side bankruptcy practice with an emphasis on creditor committee work to complement Reed Smith’s bankruptcy and restructuring group.
Prior to this acquisition, business attorneys comprised about two-thirds of Reed Smith’s New York office, according to firm-wide Managing Partner Gregory B. Jordan. The addition of the commercial litigation and bankruptcy attorneys helps even that out, he said.
Jordan estimated the entire group’s addition would bring about $40 million in annual gross revenue to the firm.
He said the two firms originally started out discussing the possibility of a full-scale merger, but conflicts put an end to that.
While neither firm represents insurers, some of the insurance recovery attorneys at Anderson Kill were representing parties in large bankruptcies that were in conflict with Reed Smith clients, he said.
Jeffrey L. Glatzer, the former firm-wide president and chief executive officer of Anderson Kill who will be moving to Reed Smith, said a group of Anderson Kill attorneys wanted to continue talks after the merger discussion ended.
He said talks between the two firms began in the middle of 2007.
In a statement issued by Anderson Kill, the firm said it would restructure its core practices to focus on insurance recovery, as well as its corporate and securities, litigation, real estate and construction, tax, trusts and estates, bankruptcy and restructuring, and intellectual property practices.
The firm said the change is the result of an “amicable” departure of several of its 69 shareholders.
“We recently held merger discussions with Reed Smith,” Horkovich said in a statement. “We terminated the discussions because of conflicts of interest issues.”
In a rare twist, he said, the firms are cooperating to make the transition go smoothly.
The merger discussions gave the firm the opportunity to look at moving to a larger platform, but a “substantial majority of shareholders” decided that was not the best move, according to the statement.
Horkovich said the restructured Anderson Kill is financially strong, having invested heavily in the firm for the future and having eliminated all debt.
The firm said it has more personalized service than larger firms and that a number of clients previously served by the departing group have said they want to continue to work with Anderson Kill.
Glatzer said a substantial majority of the clients he expected to move with the group have already said they would. He said he is happy with the group of attorneys that is going to Reed Smith. It is mainly made up of the attorneys he has practiced with for the past 18 years he was at Anderson Kill.
Jordan said almost all of the offers Reed Smith gave to Anderson Kill attorneys were accepted.
The core of Reed Smith’s client group is made up of banks, pharmaceutical companies, manufacturers, and technology and media companies, Jordan said. The insurance recovery practice � which will soon have more than 50 attorneys � allows the firm to represent those core clients in disputes with their insurance companies. He said it is one of the firm’s fastest growing and most profitable practice areas.
Aside from Glatzer, Anderson Kill’s Lawrence Kill, a name partner and co-chairman of its antitrust and unfair competition group, will be joining Reed Smith.
Other members of Anderson Kill management who are joining Reed Smith include; James M. Davis, managing partner of the Chicago office; John N. Ellison, managing partner of the Philadelphia office; and executive committee members Steven Cooper and J. Andrew Rahl Jr. Shareholder Timothy P. Law will also be joining the Philadelphia office as a partner.
According to Ellison, just about everyone in the Philadelphia office of 18 attorneys was given an offer. He said people had to make decisions about whether their practice would have a future at a large firm like Reed Smith.
Ellison said his client base had become more and more geographically diverse over the past few years and Reed Smith was a better fit than the more boutique culture of Anderson Kill.
Ellison’s practice focuses on energy clients, real estate developers and national homebuilders. He said he hopes he can cross sell other Reed Smith services to those clients.
Despite the several practice areas Anderson Kill intends to focus on in the future, both Glatzer and Ellison referred to it as a boutique with a national reputation in insurance recovery.
Ellison said he thinks the firm will continue to have a strong presence in insurance recovery � a practice that is the economic driver of the firm.
“There is a place for a Reed Smith and an Anderson Kill where they can both thrive,” he said.
Previous media reports had questioned whether Anderson Kill’s partnership structure would make a deal with the firm difficult for Reed Smith. Jordan said that wasn’t a problem. He said Anderson Kill had traditionally made every attorney a partner from day one, but had changed that structure 10 years ago.
Anderson Kill will maintain offices in New York; Philadelphia; Newark, N.J.; Washington, D.C.; and Greenwich, Conn. The four-attorney Chicago office will be closing.
The Anderson Kill acquisition follows on the heels of Reed Smith’s Jan. 1. merger with Richards Butler Hong Kong and its mergers in 2007 with Richards Butler London and Sachnoff & Weaver.