Life could not be sweeter for Dewey Ballantine: no sooner did the New York firm evade a potentially acrimonious union with Orrick Herrington & Sutcliffe than it managed to find the perfect partner in LeBoeuf Lamb Greene & MacRae.
As reported on www.thelawyer.com (28 August), the firms have agreed a merger that will go through at the beginning of October, subject to a partnership vote.
LeBoeuf chairman Steven Davis is to head the enlarged firm, with Dewey co-chair Mort Pierce going back to full-time fee-earning, which is possibly a blessing given that, in the words of one former Dewey partner, “Pierce is an excellent transactional lawyer but has no idea how to manage people”.
The fate of the merged firm’s London head is not so clear-cut, with Dewey London managing partner Fred Gander and his LeBoeuf counterpart Peter Sharp waiting for the regrouped management team to name the victor (www.thelawyer.com, 29 August). That said, the pair is united in its support of the merger.
“For separate and different reasons both firms were not looking to do this right now,” says Sharp. “Each was keen to achieve its goals alone, but the more we learnt about each other’s firms the more compatible we thought we were in almost every respect.”
The number one respect, of course, was that both firms wanted to up the ante in their home town of New York. The merger creates a 1,300-lawyer firm, with the bulk of those based in the US.
“Our number one priority was to grow substantially in New York,” says Gander.
It also helps that Dewey’s German and Italian offices will give LeBoeuf a presence there for the first time, while LeBoeuf can return the favour via its offices in Moscow and Paris.
Word is that both sets of partnerships are broadly supportive of the merger, if for no other reason than it gives strength in numbers. According to a Dewey source, “the deal is a good one”. It is also interesting that neither firm has seen an unnatural shedding of partners in the weeks leading up to the announcement – while talks with Orrick were ongoing Dewey suffered an exodus of dissatisfied partners.
While the deal may be a “good one”, it is also a convenient one. The source points out that Dewey’s New York office is two-thirds empty, with plenty of space for LeBoeuf to move in. In London the reverse is the case, with Dewey set to move into LeBoeuf’s Mincing Lane premises after Christmas.
For Sharp the cost savings this will bring are an added bonus of the merger. “In New York Dewey has some spare space and it’s the reverse in London, so we can combine offices without too much expense,” he says.
Just as well given that, according to the source, neither firm understands that running offices with low headcounts is not cost-effective.
Conveniently, says Sharp, Dewey will be able to move in with LeBoeuf in Washington DC while a further combination will take place in Los Angeles.
Amid the impending musical chairs, however, the firms believe the fit in terms of practice areas is enviable, with little overlap between their current offerings. Both have litigation practices, although in the main Dewey’s client list focuses on financial institutions, while LeBoeuf’s centres on insurance, energy, telecoms and utilities.
“The client lists are pretty different but very complementary,” says Gander.
Indeed, when a list of the combined firm’s top 50 clients was drawn up it was discovered that there was not a single overlap, with the total almost equally split at 24 and 26.
“It’s surprising how neat and tidy this is in terms of addressing each of our firm’s ambitions without inconvenient overlap. It’s almost like it was scripted,” gushes Sharp.
However, this is not always an advantage. If a merger provides breadth and not depth of client relationships, then is there a potential lack of focus? Most major law firms have pruned their client lists to concentrate their firepower. This is a step the combined firm will have to take in the medium term.
Sharp says the merger is the result of the firms changing and growing in their own ways in the past few years. “If we sat down three years ago the firms would have looked semi-compatible,” he adds. “Without knowing it we’ve made ourselves compatible.”
Gander is equally philosophical. “We’re two New York firms with long histories pursuing independent paths, but we came to a day when our chairmen sat down and both realised that this made sense,” he says.
It sounds almost too good to be true.