One of New Jersey’s oldest and largest firms, Pitney Hardin, is merging with Connecticut’s biggest, Day, Berry & Howard, to create a 395-lawyer power with branches ranging from Boston to Washington, D.C.
The new firm, to be known as Day Pitney, will come into being at year end.
The amalgamation reflects both firms’ need to compete in a market that is becoming increasingly regional, in which practices restricted to individual states can no longer thrive. It mirrors similar moves by McCarter & English, which has joined with practices in Hartford and Boston.
One of you wasn’t so sure Above the Law would deign to cover this:
It’s not really so newsworthy for your site, because New Jersey and Connecticut firms can never really be Big Firms, no matter how many people they stick in their New York offices, and even if they hold hands together to become a larger firm. But as an alum of one of the two firms, I was moved and figured you should know.
But we HAVE written about the merger, because we DO care (and we hail from the Garden State). We’re just a little late, that’s all — the news broke on Wednesday.
To atone for our tardiness, we pass along an insider’s detailed analysis of the Day Berry/Pitney Hardin merger. Check it out, after the jump.
Our correspondent thinks this is a smart move for Pitney — but questions whether it will be enough to guarantee success over the long term:
Pitney has masked its fundamental weakness over the last ten years by actually making some good money. But it has recently lost some substantial blood, namely, its once-premier environmental and insurance coverage practices, to true national firms.
It can’t compete with those firms on leverage, because it’s too small, or profits, because its rate card is too low. It no longer has the key thing that kept it in business for a century: A lock — well, a shared lock with McCarter & English — as the white shoe firm of New Jersey, because there is no need for a true New Jersey firm any more. Newark and Princeton are brimming with offices of national firms whose national clients want one-stop shopping, and they aren’t impressed by Pitney’s lineup either in depth or breadth; 20 or even 40 percent lower rates don’t make much of a difference for serious commercial work.
This was a strategic error never recognized by firm planners. Former firm head Clyde Szuch predicted that megafirm billing rates could never survive the cutthroat competition in the profession, and that PHKS would swoop in and pick up the business. He said this back when rates at top firms were half of what they are now. Pitney’s have actually increased a like percentage, but not enough.
The merger makes sense because it enhances leverage. But it still doesn’t help Pitney become more than a boutique presence in New York, which it has to do to survive in the long run. Even McCarter, whose moves in Connecticut this mimics, is still not a serious player in New York. It’s part of that unshakeable New Jersey, er, mystique you might say, that its law firms can’t even achieve the respectability in the Big Apple of even Philadelphia branch offices.
Day, Berry & Howard and Pitney Hardin to Merge [New Jersey Law Journal via Law.com]
Pitney Hardin Merging with Connecticut Law Firm [Newark Star-Ledger]
New Jersey: Only the strong survive T-shirt [CafePress.com]