Yesterday we discussed the merger talks that are currently taking place between Akin Gump and Orrick. We solicited your views on a possible combination, and we received some interesting feedback (in the comments and by other means).
Let’s start with the happy stuff. Here are some positive takes on an Orrick / Akin merger, from the comments (yes, positivity in the comments — it happens):
- “I have been at both firms and I believe it would be a good fit both geographically and practice-wise. Orrick is almost all about finance, and finance is one key area that Akin lacks real depth.” [FN1]
- “#1 Vacuum company in America + #1 brand of cocktail shrimp = unstoppable legal force.”
Our sources don’t deny the surface appeal of the merger. It would give Orrick a greater presence in New York and in Washington — where it has some gorgeous new office space, by the way (I lived down the street in my D.C. days) — and it would give Akin a (meaningful) West Coast and international platform.
As noted in our earlier post, the numbers aren’t bad either. The combined firm would boast about 1,800 lawyers — assuming no, er, “economies of scale” (i.e., layoffs) — and over $1.5 billion in revenue — assuming no significant lawyer defections / client conflicts due to the merger.
The firms are similarly situated in several numerical respects:
- Am Law 100 rankings (by revenue): Orrick’s rank is #25 and Akin’s rank is #31, according to the latest rankings.
- Profits per partner: Orrick’s PPP in 2009 was $1.36 million, while Akin’s was $1.455 million — slightly higher, but not problematically so.
- Vault rankings: Orrick’s rank is #39 and Akin’s rank is #34, according to the latest rankings — again, not a material difference.
These pluses are nothing to scoff at. But they’re not the whole story, according to one tipster:
The only people this prospective deal may be good for is [Orrick chairman and CEO] Ralph Baxter and [Akin Gump chairman] Bruce McLean — two superlative lawyers, but two firm leaders who share other things in common: (1) they are nearing retirement, and in search of an enduring legacy; (2) they lead large firms struggling with the changes in an increasingly competitive legal services market; and (3) they each have a history of failed merger attempts (in Baxter’s case, the history is public).
Indeed. Over at Am Law Daily, Zach Lowe traces some of that history. Orrick’s list of exes includes several firms that no longer exist, either due to dissolution or absorption into a larger firm — Coudert Brothers, Venture Law Group, Donovan Leisure, Swidler Berlin (may they all rest in peace) — and two firms that are still around, Cooley and Dewey (formerly Dewey Ballantine, now Dewey & LeBoeuf). [FN2]
Orrick’s failed merger attempt with Dewey, back in 2006, was far from pretty, according to Am Law Daily:
Executive committees at both firms approved the tie-up and recommended it to their partnerships for a vote…. That’s when things started to go bad. Several star Dewey partners bolted for other firms, including Covington & Burling and Weil, Gotshal & Manges, and Orrick began worrying that its target wasn’t as appealing as it had been at first glance.
That led Orrick to ask for an extra seat on the combined firm’s executive committee, a move which would have given legacy Orrick partners a majority on that committee. Dewey bristled at that request, and at least one Dewey source told Legal Times that some partners at Dewey “perceived Orrick as a step down.” There also were issues with Dewey’s unfunded pension plan.
- “Oh my Akin’ Orrick.”
- “Great. From Dewy Orifice to Aching Orifice.”
Juvenile humor aside, there are other potential problems, according to one insider:
[T]he cultures at Orrick and Akin could not be more different. Orrick is, in many respects, a genuine and functioning (if imperfect) partnership. Akin is an uneasy collection of fiefdoms, with little real integration across practices or offices. Orrick (at least rhetorically) values “transparency” and the multiple ways in which partners contribute. Akin, on the other hand, makes no pretense at transparency and is, as a practical matter, the archetype of an “eat what you kill” firm.
Perhaps the first casualty of this prospective merger was the naivete that believed in Baxter’s vison for a “new type of law firm.” Should this merger go forward, this loss will quickly be followed by others. These will, of course, include a number of partners (voluntarily and otherwise), associates, and staff from both firms. Off the top of my head, I would also suspect that most of Akin’s Texas offices (with the possible exception of Houston and Dallas) will vanish… like the smoke of a cheap celebratory cigar.
In fairness, every major law firm merger involves the challenge of merging divergent cultures. One thinks of the merger between Wilmer Cutler and Hale & Dorr, for example. But despite the rocky start, WilmerHale has managed to “make it work,” as Tim Gunn might say.
If you have information or opinions about a merger between Akin and Orrick, or tips regarding other possible law firm mergers, please reach out to us. If you appreciated the “inside baseball” nature of this post, please note that we owe it all to readers like you, who took the time to share information and insight with us.
We can’t do our jobs without your help. Please don’t assume that someone else will send us the info, because (1) we like to have multiple sources for the same information and (2) in many cases, the assumption is incorrect. We keep all sources confidential, unless you request a shout-out. Thanks.
UPDATE: For more analysis of a possible Orrick / Akin merger, see this WSJ Law Blog post, based on an interview with consultant Peter Zeughauser.
[FN1] A snarky exchange in the comments, following up on the comment about Akin Gump lacking depth in finance:
“Where else does Akin lack depth?”
“Only two areas: the partners and the associates. Other than that, they are strong.”
This made us laugh, but it’s not a fair criticism. As noted in the ATL Career Center profile of Akin, the firm excels in bankruptcy, government relations, international trade, hedge funds, intellectual property, labor and employment, and energy. For names of specific lawyers, click here to see the 63 Akin Gump attorneys recognized by Chambers USA as leaders in their respective practice areas.
[FN2] A commenter has this quibble with the account of Orrick’s failed relationships: “It’s not really fair to say that Donovan Leisure is one of Orrick’s ‘exes.’ Orrick basically absorbed the Donovan Leisure litigation group, and it’s one of the key pieces of the firm today. The head of the Orrick NY office and many of the major litigation partners are former Donovan Leisure folks. As for Coudert, Orrick was one of the many vultures to pick that carcass clean. Baker & Mackenzie really was the firm responsible for leaving Coudert at the altar.”