Can Patton Boggs Escape From The Swamp?
How is Patton Boggs trying to save itself, and will its plan work?
Let’s not mince words: Patton Boggs is stuck in the muck. In the most recent Am Law 100 rankings, the firm showed a 15 percent decline in profits per partner — one of the biggest dips in the entire survey, contrasting with the modest growth that most of Biglaw enjoyed. Gross revenue also fell, by 6.5 percent.
The Am Law 100 rankings looked at 2012 performance compared to 2011 performance. Perhaps things have improved for Patton Boggs in 2013?
Alas, no. While many firms have resorted to voluntary buyouts or layoffs of support staff this year, few have laid off lawyers (at least not openly). But Patton Boggs has already been through two significant, open and notorious rounds of layoffs in 2013 to date, affecting not just staff but lawyers as well.
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How is Patton Boggs trying to save itself, and will its plan work?
The firm’s new “strategic plan” has been covered in Am Law Daily and also the Washington Post:
The firm, which has 450 attorneys in the United States and the Middle East, has put together a new strategic plan that includes exploring mergers and changing key internal workings, such as management structure and pay practices….
Plans are underway to run Patton Boggs more like a corporation than a traditional law firm partnership, with a new “practice management committee” made up of [managing partner Ed] Newberry, three department chairs, a chief operating officer, chief financial officer, chief marketing officer and chief technology officer. Many law firms have moved in this direction in recent years.
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So the powers-that-be want to run Patton Boggs “like a corporation.” Considering all the layoffs and cost-cutting they’ve already done, that part of the plan seems well underway.
Running Patton Boggs less like a firm and more like a corporation could cause some partners, especially those with the strongest practices and best exit opportunities, to head for the doors, intensifying the firm’s problem of lateral leakage. Meanwhile, other partners will be booted:
Patton Boggs, which has 98 equity partners and 119 nonequity partners, will also continue changing the status of some partners, Newberry said, reducing the number of equity partners to around 80 by the end of the year.
Ah yes, de-equitization — another popular strategy for navigating the “new normal.” But does it actually enhance a firm’s future prospects, or does it simply rearrange the proverbial deck chairs?
Against this chaotic backdrop, Patton Boggs continues to explore its urge to merge:
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The firm has not made a decision about merging with Texas-based law firm Locke Lord or a smaller New York firm that Newberry declined to name, but it is talking to and going through a due diligence process with both firms.
“At a 30,000-foot level, it’s a combination that has some very attractive elements,” he said of the potential marriage with Locke Lord. “We’ve made a commitment to expanding our platform and the only real way in this environment is to acquire businesses and firms, or to combine with businesses and firms.”
The potential combination with the New York firm would boost Patton Boggs’s corporate presence there, he said.
So Patton Boggs might merge with Locke Lord. Or it might merge with some New York firm. Or it might merge with a law firm outside the United States. Who will Patton Boggs not merge with?
I also can’t help wondering: is Patton Boggs trying to move in too many different directions all at once? I can understand how trimming its ranks could work hand in hand with its merger strategy; firms often slim down to make themselves more attractive to prospective mates. But could all the other changes, such as the management restructuring and the revamp of the pay system, simply complicate the effort to find a merger partner? Maybe the firm should try doing one thing at a time.
But in fairness to Patton Boggs, it might not have that luxury. Time is running out.
After a tough year, Patton Boggs maps future [Capital Business / Washington Post]
Amid Merger Talks, Patton Boggs MP Touts Strategic Plan [Am Law Daily (sub. req.)]
Earlier: Nationwide Layoff Watch: Slimming Down For The Holidays
Patton Boggs and Locke Lord May Be Eyeing Merger
Nationwide Layoff Watch: Patton Boggs Blows Folks Out the Door
