Dewey & LeBoeuf has reached its first major milestone – it is one year old. Last Wednesday (1 October) was the first anniversary of what was arguably a shotgun wedding between New York M&A powerhouse Dewey Ballantine and the more globally inclined but less elitist energy and insurance leviathan LeBoeuf Lamb Greene & MacRae.
A year ago, with the credit crunch just starting to build up a head of steam, the memory of Dewey’s scarring merger talks with Orrick Herrington & Sutcliffe were still fresh, and the champagne corks were popping on one of the biggest mergers in law firm history. Twelve months down the line and the firm remains positive about the merger.
“It’s going very well,” says former Dewey chairman and New York corporate rainmaker Mort Pierce. “Putting it into an M&A perspective, the easiest thing is negotiating the ;deal ;and ;the ;hardest ;is integrating the two sides afterwards.
“So many things you negotiate hardest over turn out to be irrelevant – such as who’s going to be on the executive committee, will it be an equal number from both sides,
how the compensation will be determined, and so on.”
Pierce, of course, knows only too well how these negotiating points can derail a deal. Several of them were understood to be critical to the firm’s discussions with Orrick eventually breaking down. So it is illuminating to hear Pierce discuss them in the context of a merger that did go ahead.
“A year on people don’t worry about these things at all,” he asserts. “They’re completely irrelevant.”
What is not irrelevant, as Pierce says, is integration. The market’s perception of Dewey one year on is that the deal has been largely positive for both firms, but that the combined entity has been relatively low key of late.
“Overall I think it’s been pretty positive,” confirms Tony Williams of consultancy Jomati. “It’s always difficult when one potential merger disintegrates and another deal happens, and it was a wobbly period for Dewey.
“I wouldn’t say they’ve taken the market by storm, but in this current environment what they’ve achieved would have to be put down as a success for both firms. It’s been a good, stable year.”
The reason for the lack of market-shaking headlines, the firm’s partners argue, is that for much of the past year the focus has primarily been on integration.
“The first six months were mainly about fixing systems,” says one London-based partner.
The two firms have spent much of the past 12 months having what the same partner describes as “objective discussions” about picking the best bits from both firms.
For example, Dewey used Lotus Notes, while LeBoeuf was on Outlook. Also, both firms had their own intranets working side-by-side up until recently.
“We just launched a new one last month,” the London partner reveals.
And it was only in July that the firm migrated onto the same billing system. So the back office concerns have taken considerable time to sort out. Boring, but essential.
“If you don’t get the back office systems right then the front of house won’t happen,” the partner adds.
It is a story confirmed by Dewey’s jet-setting chairman Steve Davis. “One year in we feel we’ve now completed the mechanical aspects of the merger, such as email systems and so on,” he says. “We’re now concentrating on the human integration.”
This means looking at the client base and offering more of the firm’s services to clients.
“That’s the real juice of the combination,” adds Davis. “To be able to say, ‘You use us for this, how about using us for that.’”
To that end, Dewey recently introduced weekly meetings open to all partners focused on a particular client. The idea is to cross-pollinate the top 25 clients or so into each of its offices.
“By having regular meetings and encouraging communication, the barriers fall,” argues Davis.
This is hardly earth-shattering stuff, and it is nothing the magic circle was not doing five years ago, but it is going to be vital if Dewey is to achieve its longer-term ambition of breaking into the top 10 of global firms.
“We’ve been really explicit about our goal,” says Davis. “We moved ourselves significantly simply by combining, but there’s a lot of work to be done to get where we want to be.”
With one year chalked up, the real test starts now.