Law Firm Merger Mania: Townsend and Kilpatrick Kill Talks

Back in May, we reported on merger rumors involving Kilpatrick Stockton and Townsend and Townsend and Crew. As it turns out, the firms were in talks — but now those talks have fallen apart.

As the two firms told the Daily Journal, the talks were called off because of a familiar reason: potential client conflicts. According to a statement issued by Kilpatrick’s co-managing partner, William Dorris, “We explored merger discussions with our friends at Townsend, but clients always come first. When client-related conflicts could not be resolved, we could not proceed further.”

What made the merger alluring initially?

Townsend chairwoman Maureen Sheehy explained to the Daily Journal what made a Kilpatrick combination so appealing:

Townsend had been intrigued by a merger with Kilpatrick because of the potential to create an intellectual property “powerhouse,” Sheehy said. Townsend, a 200-lawyer firm, is known particularly for its patent prosecution practice, and Kilpatrick, a 500-lawyer firm, is well-known for its trademark and copyright practice. The lack of geographic overlap, with the exception of their offices in Washington, D.C., was also a plus.

Is the termination of the talks bad news for Townsend? Possibly. Reports the DJ:

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Townsend continued to lose attorneys in recent weeks while its fate was in limbo. The most recent departure came last week, when patent prosecution partner Romy Celli joined Atlanta-based Alston + Bird in Menlo Park….

Sheehy attributed Celli’s departure to her decision to follow a patent portfolio she serviced, which got moved to Alston. Sheehy acknowledged other Townsend lawyers who serviced that portfolio might also choose to go to Alston.

One recruiter, speaking on condition of anonymity, said he believes it’s only a matter of time before Townsend’s life sciences capabilities in Silicon Valley are severely diminished. He named Celli and Townsend partner Joseph Liebeschuetz as those who controlled the firm’s life sciences prosecution practice.

The firm’s other partner losses in recent months have included Matthew Hulse, a patent litigator from the firm’s well-respected electronic industry group, who moved to Quinn Emanuel Urquhart & Sullivan in Palo Alto in May, and patent litigator Robert McFarlane, who joined Carroll, Burdick & McDonough in San Francisco in April. Other departed partners include Siegfried Ruppert and Guy Chambers, who left for Duane Morris in San Francisco in February. The firm also lost preeminent trial lawyer Daniel Furniss, who died in February of a heart attack.

The Daily Journal article, by Jill Redhage and Sara Randazzo, adds that the legal consultancy Hildebrandt Baker Robbins advised Townsend to explore a merger “while its financial results looked good and it had suitors.” This sounds a lot like dating advice one might give to a yuppie: snag a mate while you’re young and fit; then you can let yourself go.

The Townsend situation raises a broader question: Is the intellectual property boutique still a viable structure in today’s market? Read more over at the Daily Journal (subscription).

Townsend Merger Talks Called Off Over Conflicts [Daily Journal]

Earlier: Law Firm Merger Mania? Townsend and Kilpatrick Might Be in Talks; Hogan Lovells Officially Debuts

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