Bankruptcy, Biglaw, Lateral Moves, Law Firm Mergers, Partner Issues, Partner Profits

Bingham McCutchen Readies Itself For Rescue

Will Bingham go the way of Patton Boggs or Dewey & LeBoeuf?

By  
on

When a law firm hits rough seas these days, people wonder: will it go the way of Patton Boggs, or will it go the way of Dewey & LeBoeuf?

Both Patton Boggs and Dewey & LeBoeuf wound up in very dire straits. But the former got successfully rescued by Squire Sanders, while the latter got — well, boy Dewey know what happened there.

What does the future hold for troubled Bingham McCutchen? Here are the latest updates….

Earlier today, the WSJ Law Blog reported on the Bingham partnership’s pending vote on the proposed merger with Morgan Lewis:

A vote by Bingham’s partnership on the potential combination was in progress over the weekend, and is expected to conclude on Monday, according to two people briefed on the matter.

Both sides would need to approve the deal in order for it to go forward. The timing on a vote by Morgan Lewis’s partnership was not immediately clear. Bingham declined to comment on Monday. Morgan Lewis also declined.

I’m guessing that the Bingham partnership will vote in favor of the deal. Even though Bingham partners are being treated very differently under the proposed transaction, with some offered generous incentives to stay and others getting booted from the partnership, what are the other options on the table (besides the dreaded B-word)? As we previously observed regarding the Squire Sanders takeover of Patton Boggs, “When a lifeboat pulls up, you don’t play hard to get.”

Sponsored

Like a bride dieting to fit in her wedding dress, Bingham McCutchen has been cutting fat in advance of a Morgan Lewis merger. Over the past year, Bingham has been trimming excess associates from its ranks. Additional cuts would probably take place after a merger too, but there’s no point in postponing the inevitable.

So will the deal go through? We shall see; the Morgan Lewis partners have yet to vote. One ATL reader isn’t optmistic: “Josh Sterling was co-head of derivatives practice at Bingham — and he just joined Morgan Lewis. Perhaps this is a rolling merger process, but I would lean toward a different interpretation.”

As we mentioned last week, though, picking off individual partners comes with complications, especially in light of a recent ruling in the Dewey bankruptcy case. Even if liabilities in the event of a Bingham bankruptcy belong to individual partners rather than whatever firm they wind up joining, these debts could affect the negotiations between former Bingham partners and firms seeking their talents.

I tend to be a skeptic when it comes to law firm mergers. Some of the most prestigious and profitable firms in the country have never done, and never will do, a merger. The benefits of mergers are often overstated. But in a Patton Boggs or Bingham McCutchen situation, a merger is preferable to the alternative. You can’t overstate the value of survival.

UPDATE (11/11/2014, 4:00 p.m.): No surprise there: partners at Bingham have voted in favor of the Morgan Lewis merger, according to the WSJ Law Blog.

Sponsored

Proposed Bingham-Morgan Lewis Tie-Up Inches Closer to the Finish Line [WSJ Law Blog]
Bingham, Edwards Wildman Slim Down Ahead of Potential Mergers [American Lawyer via Morning Docket]

Earlier: Bingham Cancels Partner Retreat; Will The Morgan Lewis Deal Go Through?
Bingham McCutchen: Is The Patient Stabilizing?
The Rise And Fall of Bingham McCutchen
What Needs To Happen For the Bingham / Morgan Lewis Deal To Proceed
Law Firm Merger Mania: Bingham McCutchen And Morgan Lewis Reach A Deal

Topics

, , , , , , , , , , , , , , ,