Could Bingham Merger Talks Trigger More Partner Departures?
Who might leave if Bingham McCutchen merges with Morgan Lewis?
Observers of the legal industry have been wondering about the future of Bingham McCutchen for the past several months. In the wake of a rocky 2013, which triggered some lawyer departures and staff reductions, there has been a fair amount of merger talk.
Some have wondered whether Bingham might “fall victim to its own strategy” — i.e., whether the firm, which grew in power and profitability by swallowing up other firms, might itself get eaten up by a rival.
So what’s the latest on the Bingham merger talk front? And what might happen if the talks go further?
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Here’s a report from Am Law Daily (via Morning Docket):
James Roome, a London-based managing partner, global financial restructuring cochair and executive board member at Bingham McCutchen, could lead an overseas exodus of international partners from the firm should it push forward with merger talks with Morgan, Lewis & Bockius.
Roome’s potential departure from Bingham would be a huge blow to the 800-lawyer firm, which recently revamped its leadership structure and compensation system after a tough year financially in 2013. Four former Bingham partners told The Am Law Daily on the condition of anonymity that Roome — a key ally of Bingham chairman Jay Zimmerman, who on June 1 stepped aside from day-to-day management of the firm in favor of managing partner Steven Browne — was in talks to leave the firm, with Akin Gump Strauss Hauer & Feld among those vying for his services.
The “huge blow” would come not just from Roome leaving, but from his taking a good chunk of his team along with him, as Legal Week and Legal Business suggest. Bingham could be looking at double-digit partner defections, according to Am Law:
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Roome’s departure could spur a mass exodus from Bingham’s London office. Sources say he could take the entire group with him, making it the biggest loss for Bingham since April 2013, when an 11-partner SEC enforcement and regulatory practice led by Bingham’s former financial services cochair Neal Sullivan left for Sidley Austin. Later that year, star litigator Natasha Harrison quit Bingham’s London office for Boies, Schiller & Flexner. She had spearheaded the firm’s litigation work on behalf of bondholders in the city.
As it turns out, Roome has jumped around a bit himself over the years:
A respected member of Bingham’s 12-member executive board, which includes Zimmerman and Browne, Roome came to the firm more than a decade ago from Cadwalader, Wickersham & Taft, having opened the latter’s London office in 1998 after lateraling from British firm Simmons & Simmons. Roome was recruited to Bingham a mere two-and-a-half years later after he approached Bingham’s current London finance group head Barry Russell—a U.S.-trained lawyer—to see if he might be interested in joining Cadwalader.
Roome’s departure would not be good news for Bingham — but would it really be that surprising, given his alliance with Jay Zimmerman and Jay Z.’s recent departure from his post as top dog? If Zimmerman’s successor as managing partner, Steven Browne, wants to take the firm in a new direction, perhaps through a Morgan Lewis merger, disaffection from members of Team Zimmerman would not be shocking. As managing partner turned law firm consultant Edwin Reeser put it to me when I asked him for comment on the Bingham situation:
You have to expect that any major law firm combination is going to involve disaffection to a few powerful players in both firms. While many of them can be convinced to stay with the new direction of the firm in strategy and vision, some won’t be willing to make the investment or sacrifice to pursue a new course they just don’t believe in. It’s like being on cruise ship headed to Bermuda, and then there is an announcement that you are going to London instead. “Hey, great place, but I am packed wrong for that trip! Get me off the boat and onto another going to Bermuda, lads.”
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Of course, it should be noted that any Bingham/Morgan Lewis combination is far from a done deal. There are some reasons to think such a union might work, as Am Law points out:
Bingham and Morgan Lewis do share similar financial metrics, with revenue per lawyer of $960,000 and $945,000, respectively. Profits per equity partner sank 12.7 percent at Bingham last year, to $1.48 million, while Morgan Lewis saw equity partners profits inch up to $1.57 million. The firms also share some geographical overlap, with common offices in Beijing, Boston, Frankfurt, London, Los Angeles, New York, Orange County, Calif., Palo Alto, San Francisco, Tokyo and Washington, D.C.
And there are also some potential impediments. One is Bingham’s big size; it’s not easy to swallow a whale. Another is the aforementioned geographical overlap, which isn’t necessarily a good thing — it raises more logistical difficulties, such as which firm’s leadership and office space will prevail in a given city. Additional challenges include divergences between the firms in terms of leverage ratios and capital structures.
So is there still room for Roome at Bingham, or will he be takin’ his talents to Akin? Will Bingham manage to merge with Morgan Lewis, or will conflicts and complications kill the deal? Stay tuned — and if you have inside info you’d like to share, please email us or text us (646-820-8477).
Key Bingham Group Mulling Move Amid Merger Talks [Am Law Daily via Morning Docket]
Bingham’s City arm faces restructuring team exodus to Akin Gump [Legal Business]
Bingham In Morgan Lewis Merger Talks As London Office Mulls Split [Legal Week (sub. req.)]
Earlier: The Future Of Bingham McCutchen
Is Bingham Experiencing The Urge To Merge?
What’s Going On At Bingham McCutchen?
