The spin that Powell Goldstein chairman James McAlpin always wanted was finally released in today’s Fulton County Daily Report (subscription). The official announcement blurs the lines between a “merger” between Bryan Cave and PoGo and an acquisition of PoGo by Bryan Cave, but the report is largely positive:
“This is a transformational event for us,” said Powell Goldstein’s chairman, James J. McAlpin Jr. “It propels us into a different league.”
PoGo gives up its name in the deal and cedes leadership to the St. Louis firm. (The firm will be Bryan Cave-Powell Goldstein for two years in Atlanta and simply Bryan Cave elsewhere.) In return, PoGo’s lawyers gain an international and national platform that expands the depth and breadth of their practice groups–increasing the firm’s resources in areas such as intellectual property and broadening its core areas of banking, finance, real estate and litigation.
Getting swallowed up by a much larger firm and losing a 100-year old name certainly has all the bells and whistles of an acquisition, but partners on both sides characterize the deal as a “combination.”
Some Bryan Cave partners, like their partners-to-be from PoGo, prefer to characterize the deal as a combination, not an acquisition–even though their firm will absorb the smaller one.
“It’s a combination, not a slash-and-burn acquisition,” said Kenneth L. Henderson, the Bryan Cave partner who’s overseeing the integration. Henderson was a member of the 170-lawyer New York firm Robinson Silverman, Pearce, Aronsohn & Berman that Bryan Cave acquired six years ago in its last major acquisition.
Whatever it’s called, PoGo associates really only care about their future job security. More on that after the jump.
Back in the day, yours truly was offered a 1L SA position at Robinson Silverman (I turned it down for the opportunity to work for now-NYS comptroller Tom DiNapoli). An acquaintance I made there still works for Bryan Cave. So, there’s at least one anecdotal data point suggesting that Bryan Cave will not take a flamethrower to PoGo.
On a Friday conference call we reported on, Chairman McAlpin made the point that the “first draft” of the deal included a provision protecting the jobs of PoGo associates. McAlpin reiterated the point Monday:
McAlpin said that PoGo will not have to shed any lawyers or staff to make the deal happen. “All of our employees will move over,” he said, adding that it was Bryan Cave that specified that condition in the first draft of the term sheet–another gesture that bolstered the PoGo partners’ confidence.
PoGo’s chairman declined to say if all of his firm’s partners would become partners at Bryan Cave. “I’m not going to comment on the structure of the combined partnership just as I would not comment on that of Powell Goldstein,” said McAlpin.
Three of Powell Goldstein’s lawyers–McAlpin, Robin R. Green and Rick Miller–will join Bryan Cave’s executive committee. McNeill will continue as the Atlanta managing partner–but now for Bryan Cave–and will join the firm’s management committee. McAlpin and Miller also will be on Bryan Cave’s compensation committee. “We will have a seat at the table almost as much as anyone else, given our size,” McNeill said.
While those statements fall short of an associate job “guarantee,” clearly the expectation is that the biggest difference in PoGo’s Atlanta office will be the name on the door.
But regardless of the spin, this merger is a victory for a firm that some people feared wouldn’t make it through the economic crisis. PoGo had been struggling, even in their home market of Atlanta, for some time:
The loss of a major chunk of the health care practice, a core strength, was a big blow for PoGo. Some PoGo watchers wondered if it would be a mortal blow.
Meanwhile there was a steady trickle of partners leaving for pastures they perceived as greener. By 2007, the trickle was becoming a steady stream, and the firm continued to shrink. Since January, PoGo’s head count has dropped from 256 lawyers to 220 lawyers, according to a headcount provided by the firm. Its Washington office has contracted by more than a third, from 66 lawyers to 36 lawyers at present. Before the loss of the trade group six years ago, that office had 110 lawyers.
PoGo’s revenue has almost doubled since 1993–from $69 million then to $133 million last year. But the Daily Report Dozen’s perennially top-ranked firm, King & Spalding, more than quintupled its revenue in the same time span–from $114.5 million in 1993 to a whopping $615 million in 2007.
By last year, PoGo had slipped another spot in the rankings, behind Ogletree, Deakins, Nash, Smoak & Stewart, which had been steadily adding to its own empire over the years to become the country’s third-largest labor and employment firm.
We’ve reported on more failed mergers than successful ones recently. Whatever the future holds with Bryan Cave, it is undoubtedly a better option for PoGo than continuing to go it alone.
Powell Goldstein merges with St. Louis’ Bryan Cave [Fulton County Daily Report] (subscription)
Earlier: Update: Powell Goldstein’s Internal Response to Bryan Cave Acquisition