Biglaw

Biglaw Merger Creates New 1,000 Lawyer Firm

After months of speculation, two firms with complementary energy practices merge.

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It’s been a rocky road to merger for Hunton & Williams and Andrews Kurth, but it’s finally official. Hunton Andrews Kurth will be born on April 2 at… let’s say 175,364 lbs. 6 oz. And, yes that’s probably being generous to a firm that will have 300 lawyers in prime BBQ territory. Or maybe it’s best to blame Tex-Mex, given the parties agree that the merger was first hatched in a Houston Tex-Mex restaurant.

Whatever restaurant you pick, the two firms had no trouble splitting the check. The downfall of most firm mergers is a pronounced gap between each firm’s financial position. But Hunton & Williams and Andrews Kurth paint almost frighteningly similar portraits. Per Texas Lawyer:

In 2016, Andrews Kurth posted gross revenue of $289 million with 327 lawyers, while gross revenue at Hunton & Williams was $541 million with 661 lawyers. But revenue per lawyer and profits per partner at the two firms were very close. RPL was $883,000 at Andrews Kurth in 2016 compared with $820,000 at Hunton & Williams. PPP was $1,259,000 at Andrews Kurth, compared with $1,100,000 at Hunton & Williams.

Those revenue figures are sufficient to land the new firm in the Am Law 50, the coveted upper-tier of the legal landscape that smaller firms — especially Texas firms — are clawing toward in an era where the Am Law 51-200 are getting increasingly edged out:

The merger is another sign that firms outside of the Am Law 50 are feeling increasing market pressure to remain competitive and looking to achieve this by growing larger. Other large Texas firms are also in merger talks, including Foley & Lardner and Gardere Wynne Sewell and Strasburger & Price and Clark Hill.

Unfortunately for firms grasping for the brass ring, a slot in the Am Law 50 isn’t even a guarantee of success anymore, with the gap between the top 10-20 firms and the rest of the pack growing every quarter. But there’s reason to believe Hunton Andrews Kurth will have an advantage that the rest of the Am Law 50 don’t.

While growth for the sake of growth is usually a recipe for disaster — a costly exercise in ballooning overhead to capture scraps of additional revenue — the Hunton Andrews Kurth merger offers growth with purpose. Melding a heavy oil and gas business with a firm elbow-deep in representing utilities creates a Biglaw force with pronounced expertise in the energy sector at a time when energy is among the hottest global business segments.

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The exodus of Andrews Kurth attorneys, including whole practice groups, raised concerns that the deal may be in trouble. Worse, it raised concerns that if Hunton & Williams walked away, Andrews Kurth could find itself picked clean in short order as rival firms smelled blood in the water. In the end, these concerns were all overblown and the departures may have actually eased the merger by shuttling off expertise that didn’t match the core mission of the new firm.

Congratulations to both sides for completing this long-awaited deal.

It’s Official: Andrews Kurth and Hunton & Williams Will Merge [Texas Lawyer]

Earlier:

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HeadshotJoe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.

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