Law Firm Merger Mania: Bingham McCutchen Acquires McKee Nelson
Bingham McCutchen has found a way to expand during the recession. Just weeks after losing 11 lawyers (5 partners and 6 associates) to Morgan Lewis, Bingham McCutchen has acquired McKee Nelson. The American Lawyer reports:
After enduring a rough few years caused by the collapse of the structured finance market, the elite specialty firm of McKee Nelson has agreed to be acquired by the larger Bingham McCutchen.Partners at both firms were informed Monday morning of the merger, which is scheduled to take effect August 1. The combined firm will be called Bingham McCutchen, and will include all of McKee Nelson’s lawyers.
No word on whether the McKee attorneys have the CHARACTER to become Bingham attorneys. But the merger looks good on paper:
McKee Nelson, which is known as one of the pre-eminent firms for tax planning and tax litigation, was viewed by Bingham as an attractive addition. “It’s really rare to find a firm that is this size that has three market-leading practices,” says Bingham chairman Jay Zimmerman, referring to McKee’s expertise in tax, financial institution litigation, and capital markets-structured finance. Structured finance might be moribund now, but Zimmerman sees it as an area worth investing in. “It will be part of our longterm strategy for serving the financial institution industry.”
How does this work on the McKee side of the ledger? We check in after the jump.
McKee has been shedding people, but firm management says that the firm wasn’t desperate to find a merger partner:
Reed Auerbach, a co-chief executive partner of McKee Nelson, says his firm wasn’t under pressure to find a merger partner. “We had already done the hard work to size the [structured finance] practice appropriately,” he explains. At its peak in 2006, Auerbach notes, the group had more than 120 lawyers; today that number is about a quarter of that with roughly 30 attorneys. (Twenty-three lawyers were laid off, 30 joined Ashurst in February, 26 departed under a voluntary program, and 9 moved to other practice areas.) McKee is not carrying excessive debt, Auerbach says, noting that it owes less than $10 million to banks.
Certainly, slimmer is better if you are looking to merge. And it appears that McKee had already done the heavy lifting of firing its structured finance attorneys in response to the near-death experience of the structured finance market.
But this merger feels a lot more like an acquisition. Bingham McCutchen will still be the name of the firm, and only a few McKee partners will hold leadership positions at their new firm:
McKee Nelson’s leaders will hold some positions of power at the combined firm, but Bingham’s management will clearly be in charge. Auerbach will be the only partner from the smaller firm to sit on Bingham’s 12-person management committee. Nelson and McKee will co-head the tax group, Jeffrey Smith will run the financial institutions litigation group, and Auerbach will manage the capital markets group.
Good luck to Bingham McCutchen and former McKee Nelson attorneys.
Bingham McCutchen Acquires McKee Nelson [American Lawyer]
Earlier: Musical Chairs: Morgan Lewis Expands Banking Practice in Boston
Stepford Secretary Responds to Above the Law
Nationwide Layoff Watch: McKee Nelson (Redux) (Or: The proper way to do layoffs.)
(47) Comments
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first is the worst
The West is the best.
eeeek. yum yum yum.
Stealth layoffs at mckee for months and months
Thirdsty!
TTTx2.
The new firm will be called McKutchen McKee & McDonalds
1, 5 = fail
Good job getting this up only half an hour or so after WSJ blog. Now go fix the Ropes & Gray post. (Hint: think Skadden, not Cravath, when considering comparable summer associate pre-deferals.)
Bingham's acquisition of McKee Nelson makes neither entity a peer firm. Every week we get calls from smaller firms wishing to be absorbed by or merged with us. We are not fools. It is obvious to me that some firms are cooking books to appear financially healthy on paper. They are looking for a lifeline that I personally will not condone throwing at them. Let these non-peer firms dissolve so that only the strong peer firms remain standing.
PE, you should see Kash's balance sheet. Fort Knox.
are they letting people with banned accounts come back? or is it a one and done kind of thing?
No clip art of lawyers getting their ties tied together? TTT
Glad to see that Red Auerbach has found gainful employment after all those years of serving as coach and general manager of the Celtics.
Good for Bingham. I've been wishing my firm would merge with McKee for years.
PE, if you actually were an attorney, you would know that real law firms don't care about peer this or peer that. They care only about money. Green is green, as they say.
Are you going to post anything about the Villanova law dean's resignation?
Bingham is getting a gem.
Weil cuts salaries in London!!!! Is US next??
http://www.thelawyer.com/weil-gotshal-cuts-nq-salary-to-%C2%A385000/1001294.article
This is fucking garbage. Maybe Bingham can give me my job back now?
PE,
You obviously no very little about tax practices. Go back to your bar studies.
Wrongful termination lawsuits are up according to this article: http://lawblog.legalmatch.com/2009/06/24/what-fired-but-why/ Bingham better be ready for a wave of them from all the "redundant" employees.
20 - are you sure you "no" what you're talking about?
There is know way that 20 nos more than PE.
McKee >>>>>> Bingham. I have no clue how Bingham pulled this one off.
So, will Bingham hire back the Stepfort Secy now???
PHJW will be the next to fall. They're having a big problem with their credit line.
well played, 13. that was the first thing that sprung to mind while reading the post.
26- The story here in LA is that the bank is asking for personal guarantees from the partnership. This ship is fucked.
28
I've heard this rumour from a friend on the management committee.
A merger like this doesn't necessarily mean that McKee was in trouble. This may have happened with or without the recession. Note that all McKee's attorneys will continue at the new firm.
Future revival of structured finance? You mean these guys will get a second chance to destroy the financial markets (and lives)?
This was not such a great move by Bingham. McKee was founded by and filled with Structured Finance partners who bolted from several other big firms for their own shop during the boom times. They were very proud of their independence.
IF this market ever comes back, they've already demonstrated a strong desire for independence. In better times they may try to leave again.
I have a top 3 JD and a LLM in tax and I am having enormous difficulty finding a job in tax.
I've been told that tax sucks right now and that the only places hiring are accounting firms.
Anyone want to confirm or deny that?
30 - you're wrong on both counts. (Presumably you still work at McKee.) They were in trouble; although the recession (and death of structured finance) is the primary reason. Also not all lawyers will go over to Bingham -- there are several still remaining who have been given the old "take as much time as you need to find a new job" speech, but will not be making this move.
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30 - you're wrong on both counts. (Presumably you still work at McKee.) They were in trouble; although the recession (and death of structured finance) is the primary reason. Also not all lawyers will go over to Bingham -- there are several still remaining who have been given the old "take as much time as you need to find a new job" speech, but will not be making this move.
Bingham has nice offices, which makes working there really, really fun.
I also heard that not everyone will be heading to Bingham.
38, what have you heard?
why not talk about how bingham plans on no-offering a significant portion of their summer class? hell, they're not even pretending that's not the case. what a rancid TTT
39, I haven't heard anything in particular. -38
40 - how is that different from any other firm? If that's even true, which I doubt, at least they're being upfront about it.
33 - I am out here looking for a job as well, and will concur. But, what's your problem with working at an accounting firm? Law firms suck - if you don't already know this, then you can take my word for it.....
It's interesting that neither McKee nor Nelson, the name partners who ran their firm until Auerbach took over when things got ugly, are going to be in senior management. I hear Auerbach is a stud.
33, you don't want to work for an accounting firm. It is awful - you get stuck in a pool of hundreds of employees, most of who are right out of college and just want to get drunk and hook up.
Okay maybe the last part isn't so bad, but working here is totally de-humanizing. And the salary SUCKS.
I heard it’s been rough going at McKee for a long time. They’ve suffered through buy-outs, legit layoffs, stealth layoffs, two attorney suicides, partner and practice group defections, months of merger rumors and more. This is the kind of stuff that builds CHARACTER, which is exactly what they need to succeed at Bingham. Good luck guys.
Hey 19! That's what I thought? WTF? forget the lawyers it lost to Morgan -- what about all of us who just got laid off over the past four months? I laughed really hard when I saw the published comment that Bingham Boston would retain all management functions. Now, that's a surprise. Those control freaks wouldn't know how to share or collaborate if their lives depended on it.