FOR IMMEDIATE RELEASE
By Jess Davis
Law360, New York (March 30, 2015, 9:40 PM ET) — As law firms across the U.S. look to Texas for expansion, local firms are finding they feel at home with Midwest firms that share a friendly culture and focus on client service, a dynamic that played a key role in the merger announced Monday between San Antonio-based Cox Smith Matthews Inc. and Dykema Gossett PLLC, a Detroit and Chicago powerhouse.
Leaders of the firms said they think they’ll be able to avoid many of the bumps in the road that have plagued other law firm combinations because they already share a similar approach to client service and rate structure and have a genuine collegiality instead of sharp elbows and cutthroat tactics, adding up to that nebulous but all-important factor: firm culture.
When it comes to culture, Texas and the Midwest have a history of pairing well and partnerships between firms from the two regions have borne fruitful relationships in recent years. There was the 2007 combination of Texas stalwart Locke Liddell & Sapp LLP and Chicago’s Lord Bissell & Brook LLP into Locke Lord LLP and the 2013 acquisition of Texas’s Brown McCarroll PC by Husch Blackwell LLP, the product of mergers between firms from St. Louis, Kansas City and Chicago. On a smaller scale, Ohio’s Vorys Sater Seymour and Pease LLP in December absorbed the Houston-based litigation practice ofSchwartz Junell Greenberg & Oathout LLP.
“There is a natural, complementary synergy between Texas and Midwest firms,” legal consultant Lee Allbritton of Amicus Search Group LLC said. “It all has to do with billing rate compatibility, cultural commonalities, and the Midwestern firms’ greater likelihood of taking a more holistic approach to merging with an intact Texas firm, rather than cherry-picking individuals out of the Texas firm that is more common with entrants to our market from more expensive locales, e.g. New York firms.”
Sharing a similar firm culture is also important for Midwestern firms trying to attract Texas lawyers in the lateral hiring market, and for Midwest firms looking to establish long-term rapport with Texas clients and grow beyond a single practice area specialty to become stable and resilient in the Texas market.
That’s not to say firms from other regions haven’t been successful in breaking into the Texas market, whether through mergers or lateral hiring. But there’s a shared sensibility between the Lone Star State and its neighbors to the north that makes it relatively easy to team up, lawyers say.
“It may flow from the Great Lakes to the Rio Grande – a similarity in personality and approach to the practice of law that was surprising to me,” Cox Smith Managing Director Deborah Williamson said.
For both Cox Smith and Dykema, firm culture was an important factor in deciding whether to join forces. Williamson said Dykema’s lawyers proved to be “genuinely, genuinely nice people” who share a client-first attitude in which partners focus on service to the client instead of making the most money.
“At one point in these conversations, I said I think we’re all Midwesterners,” Williamson said. “It just clicked, and it’s hard to articulate – we’re Texans and we’re very proud of being Texans – but there was an ease in discussion and a fairly quick level, development of trust that I’ve heard in other mergers doesn’t happen quite as quickly.”
Dykema CEO Peter Kellett said Cox Smith’s attention to client service is one of the key ingredients the firm thought would make the combination successful. Sharing values and having a common culture will serve Dykema well with Cox Smith, he said.
“I’m not an expert in demographics but the folks in Texas that we know are a lot like us,” Kellett said. “We went to Dallas seven years ago and the people we have met and that have joined us have been very like us. There’s a high value on client service, high value on excellent results and good collegiality, which is really important in working well with partners and other professional colleagues. There’s not a lot of sharp elbows that create problems internally.”
Adam Hauser, the managing partner of Brown McCarroll before its merger with Husch Blackwell, said culture was a “critical component” in the firms’ merger discussions and has been borne out in the years since the firms joined forces. The Austin-based firm was getting a lot of calls from out-of-state firms, and its partners felt they needed a good cultural fit with whoever the firm had serious discussions with, ruling out a number of possible matches, Hauser said.
“It was pretty easy to determine after discussions with potential suitors which ones were going to be a good fit and which weren’t,” he said. “Texas is a unique culture, it’s known as a friendly place where people are more approachable, friendly and down home. I don’t want to say anything negative about other parts of the country.”
Kansas City-based Polsinelli PC has made rapid inroads in Dallas since it opened an office in 2011, drawing lateral hires from a veritable bouquet of Texas firms, including K&L Gates LLP, Bell Nunnally & Martin LLP, Bracewell & Giuliani LLP and Akin Gump Strauss Hauer & Feld LLP, increasing its size tenfold to more than 30 lawyers.
Bill Church, a Patton Boggs LLP veteran, joined Polsinelli in May, attracted by its full-service business model that means happily handling work for clients even if it’s not particularly efficient or profitable to do so, and attracted by its Midwestern values.
“One of the things I was told while interviewing that has proved true is – you’ll get a call from St. Louis partner who needs help in Texas, and they’ll ask you how are your kids, how’s the family, they might remember what university your kid’s at,” Church said. “Part of our culture is that’s for real. It’s not a veneer, it’s not pretend. They want you to ask similar questions back and then get into the business discussion.”
Church, a litigator, said he’s just as likely to work with associates in Kansas City and Denver as he is in Dallas, and teamwork is “part of the ethos.”
“We do like each other, we like working together,” he said. “It’s not all about billable hours, but collegiality and working with friends.”
Allbritton said the Midwestern firms’ experience in many ways resembles that of Pennsylvania-based firms that entered Texas. They are natural complements to Texas, and consequently, have a “seemingly more active and robust local growth trajectory,” he said.
Philadelphia-based Fox Rothschild LLP entered the Dallas market in September by snapping up 18-lawyer David & Goodman PC. The firm’s Clinton David is over the moon with the merger, and said the cultural pairing between the firms is a big reason their combination started off strong, calling it the kind of firm where people come and stay for a career.
Fox Rothschild makes sure its offices feel integrated and that lawyers work across geographic boundaries, David said. There’s no economic incentive built in for the Dallas office to hold work in the Dallas office and the goal is to have everybody assist one another in growing practices within the firm, he said.
“There’s a leadership culture of collaboration,” David said. “I don’t know so much if it’s regional, but I really believe it’s a matter of leadership structure and the message leadership sends downstream. It’s up to others to follow that lead and be successful.”
–Editing by John Quinn and Kelly Duncan
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