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Rate Flexibility Could Help Fox Rothschild Find Fit in Southeast Market

The Legal Intelligencer

As Fox Rothschild considers a potential merger with North Carolina-based Smith Moore Leatherwood, legal observers say such a tie-up could be a good fit for a firm serving a mix of large and midmarket clients and seeking a bigger national presence, but it should proceed with care.

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Barry Genkin, a corporate partner at Blank Rome who has worked on law firm mergers, said while many firms are focusing on mergers in “tier-one markets,” there is a set of law firms more focused on “less competitive” markets.

“It could be client-related, could be practice-related, or it could just be geographical expansion,” Genkin said.

A Big Bite

Smith Moore, with roughly 130 lawyers at present, is larger than any other firm Fox Rothschild has acquired in the past. Its biggest merger was with Minneapolis-based Oppenheimer Wolff & Donnelly, in 2016.

It would follow in the footsteps of two other Philadelphia-based firms that recently absorbed midsize shops. Saul Ewing merged with Arnstein & Lehr last year, taking its 250-lawyer firm to about 400 lawyers; and Ballard Spahr acquired Minneapolis-based Lindquist & Vennum as of Jan. 1, adding more than 100 lawyers.

The key to success in a deal of this size, observers said, is deliberate integration.

“The easy part of doing a merger is consummating a merger. The harder part comes after,” Genkin said. “When you’re doing mergers and acquisition of lawyers at a really rapid pace, it’s really questionable in my mind—what is the identity of the firm?”

There’s a danger of becoming “an amalgamation of lawyers working under one name,” Genkin said, and examples abound of firms that became just that. But done “prudently,” he said, and with an eye on integration, mergers that create a greater geographic footprint are generally viewed positively by clients.

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"Rate Flexibility Could Help Fox Rothschild Find Fit in Southeast Market," by Lizzy McLellan was published in The Legal Intelligencer on July 20, 2018.