Why go big when you can supersize? As has been reported recently, one of Biglaw’s most aggressive firms in terms of growth, Dentons (née Sonnenschein Nath & Rosenthal and some foreign counterparts cobbled together just a few years ago), is now in serious discussions about a combination with McKenna Long & Aldridge. Both firms are products of recent tie-ups themselves, and the combined firm should the transaction go through will be instantly one of the world’s largest, at least in terms of number of lawyers. Welcome to the age of the global Megalaw franchise, in which a firm can raise its profile by connecting with other firms in the interest of getting bigger, all the while creating a new global brand in the process. Dentons is sure giving it a try.
It is actually unfair to say that Dentons is the Biglaw equivalent of McDonald’s, or even Burger King. Biglaw brands of that stature would be Baker & McKenzie or even DLA Piper, and not only because they are bigger….
Name recognition matters, even in foreign markets, and it is fair to say that both Baker & McKenzie and DLA Piper carry more weight than Dentons at the current time, no matter the locale. Nor can Dentons hope to touch, at least for now, the global credibility of a Jones Day or Latham & Watkins, despite the fact that there are a good number of world-class lawyers already at Dentons.
But I am not sure that is their goal. What we are seeing, rather, is a bit of an experiment: a mega-firm created out of whole cloth almost overnight, composed of “component” firms that on their own might have had difficulty distinguishing themselves in their home markets, much less on a global scale. At the very least, it would take quite a bit of time to unravel this new big ball of yarn. Nothing wrong with buying time to see if the grand experiment will work.
In my view, an expanded Dentons will resemble a traditional Biglaw firm as much as a $25 artisanal burger from some Williamsburg locavore joint resembles a Big Mac. Everyone will effectively be an employee, partners included, existing at the mercy of the centralized management that will exercise serious control over individual and firm performance. While the separate member firms that compose the verein will have their own financial affairs to deal with, you can be sure that the firm’s core management team will be watching everyone’s performance quite carefully.
For starters, firms seeking to establish a brand have less margin for error when it comes to being able to reward the rainmaking partners that make the whole structure worthwhile to adopt. I have argued before that the traditional Biglaw firm exists primarily to benefit the service partner in a way that would otherwise be impossible. Firms like Dentons flip that traditional approach on its head. In a megafirm, the rainmakers are paramount, and getting bigger allows them to take an incrementally greater piece of the pie over a shorter period of time. Short-term performance is therefore of the utmost importance, as rainmakers at these firms need to see, right away, the rewards of staying in such a firm (with the requisite loss of a safety net if their own performance lags).
So the big winners, unsurprisingly, in the bigger and grander Dentons will be the firm’s current rainmakers and leadership. But there are other less obvious winners to consider — for instance, senior associates who are up for partner. The chances of elevation are greater when the firm you are at does not yet have the measure of its existing partnership. An aggressive senior associate (ideally with the right sponsor) could play the merger in their own favor, by advancing the argument that giving them the title of partner will not cost the firm anything and will open the door to immediate rate increases, if not the possibility of business development. And a mega-firm really needs to make a lot of partners on an annual basis, for marketing purposes at least. When you have a firm of 3,000+ lawyers, it looks kind of weak if your partner class is a group of ten. So if you are a senior associate at Dentons who survives the merger, make a grand push for partnership.
The other unlikely winners are existing Dentons and McKenna partners who are unhappy with their current firms. A mega-merger provides the perfect cover to shop oneself around, or even consider a graceful exit from Biglaw all together. Lawyers are such creatures of inertia that it takes a major event to get them to focus on their own happiness. I hope that a good numbers of partners will benefit from the lateral liquidity that this merger will generate.
At the same time, partners at other Biglaw firms who need a change of scenery will also benefit from having a new, insatiable firm to lateral into. It is certain that Dentons will continue to have an active lateral merry-go-round, fueled in part by a desire to project an image of growth and success. One can only assume that these partners, once at Dentons, will try and offer more flexible rates to current and prospective clients, on the argument that the size of the firm is an effective means of ensuring a successful engagement, much in the same way a smaller firm would rely on prestige to convey the same assurances. The danger, however, is that these partners (under increased performance pressure and with less loyalty to their colleagues than ever) will lean on the suicide pricing that has been Biglaw’s bane to get ahead. Time will tell.
Even associates should benefit from this merger, assuming they survive the inevitable contraction of practice groups and partners who will leave (possibly without the wherewithal on the portable business end to bring them along) in the merger frenzy. Assuming a long Biglaw career is the goal, an associate’s goal should be to develop their skills. Exposure to a greater breadth and depth of clients and practitioners should only help increase that opportunity. That is not to say that every associate will love the new firm, but being at a Biglaw behemoth in its formative stages is at least better than the associate situation at some other firms these days.
Just as some will benefit from this merger, and its creation of a bit of an alternative Biglaw firm, so will some suffer. Hopefully the collateral damage remains minimal. At the very least, everyone in Biglaw should take the opportunity to give some thought to how they would fare in a firm like Dentons. It may help you appreciate what you have, or inspire you to make a change. Either way, the Dentons experiment will be one to watch.
Could you flourish at a mega-firm? Do you think mega-firms represent a positive evolution of the traditional Biglaw firm? Let me know by email or in the comments.
Anonymous Partner is a partner at a major law firm. You can reach him by email at [email protected].