Midwestern Law Firms Rise Through Mid-Market Ranks During Turbulent Times
Two mid-market law firms founded in the heart of the United States are actively looking to grow, using two distinct roadmaps.
Cincinnati-based Taft, Stettinius & Hollister’s gross revenue of $ 365 million placed it just outside the top 100 U.S. companies by revenue last year. The company is focusing its acquisitions on growth in the Midwest.
Spencer Fane, based in Kansas City, Missouri, has increased revenue 35% to $ 153 million since the AmLaw 200 was created two years ago. It casts a wider net to include places like Florida and Tennessee.
“We did a handful of combinations, but we would do more with equal interest levels,” said Patrick Whalen, president of Spencer Fane, of his approach to business acquisition.
Mid-market law firms, a little battered by the coronavirus pandemic, are ensuring they solidify and, often, grow. Those in the back half of the top 200 companies in terms of revenue are rising sensibly as they face a tough landscape.
Taft and Spencer Fane focused on hiring individual lawyers and groups of lawyers with specific expertise, as well as combining with other law firms.
“Companies are realizing that they need to expand their areas of practice in order to better serve their clients,” said Howard Cohl, managing director of legal recruiter Major Lindsey & Africa’s Emerging Markets Group.
The revenues of the top 100 companies soared to $ 111 billion last year, while the next 100 saw more modest gains totaling just under $ 21 billion. The chasm between the two groups of law firms gave the edge to the flush behemoths, as well as the reputation influence needed to increase billing rates.
Taft decided more than ten years ago “to go super regional,” Robert J. Hicks, his managing partner, told Bloomberg Law. The firm added lawyers through combinations with firms in other Midwestern cities, including Indianapolis, Cleveland, Columbus and Chicago.
The firm added around 135 lawyers in less than two years, bringing its workforce to around 640 lawyers, said Hicks, who became a managing partner in 2017. Its turnover grew from around $ 185 million ago. three years what he expects to be. the neighborhood of $ 390 million this year, he said.
The firm says the profitability of its Midwestern offices benefits clients with lower billing rates – which are largely standard at all locations – and lawyers with a reasonable cost of living.
Taft Law, as he likes to be stylized, is best known for Robert Bilott’s extensive case against chemical giant DuPont for environmental pollution caused by its manufacture of a toxic chemical linked to Teflon. The case, which was made into the 2019 film “Dark Waters”, won a settlement of $ 671 million for some 3,500 plaintiffs. This victory allowed the Patrician Society, founded in 1885, and having ties to the family of former President William Howard Taft, to raise awareness among the public.
The firm’s current practice focuses on estate and business planning, estate and trust administration, and estate transfer litigation.
Over the past few years, Taft has added dozens of lawyers and emphasized diversity in its management structure, Hicks said. The firm has also made major structural changes by eliminating its dual partnership channels, reducing its billable hour requirements and distributing young lawyers throughout its leadership structure, he said.
“It was difficult to break the club, and we could not have done it without the contribution of the ‘old guard’,” said Hicks, explaining that the more established partners have cooperated in overhauling the strategy of the club. ‘business.
Even though their results are generally strong, mid-sized companies like Spencer Fane and Taft have sought to expand as the increase in revenue lags far behind the giant law firms, some of which reach billions.
Spencer Fane announced in August that he would team up with Nashville-based Bone McAllester Norton to add 40 lawyers to his list of attorneys. This gives the firm a presence in 20 cities.
“Over time, many firms have dramatically increased their footprint, adding more offices so they can meet the needs of their corporate clients and do not have to hire a local lawyer,” Cohl said.
Yet an expected increase in law firm reconciliations has yet to occur this year. The pace of mergers has accelerated over the past three months, but this activity still lags behind levels seen before the pandemic.
Legal counsel Fairfax Associates and other merger watchers are optimistic about the outlook ahead, especially for next year, as negotiations slowed by pandemic hurdles gradually materialize. Kent Zimmermann, a consultant for the Zeughauser Group who works with law firms of all sizes, said the interest of large and small firms in mergers had recently “quadrupled”.
Spencer Fane added an insurance group of 17 attorneys in July to expand its practice that focuses on providing clients with litigation defense in commercial, class and bad faith actions. A month earlier, the firm added 22 new attorneys to Denver, expanding its litigation and dispute resolution practice group, as well as its work and employment capabilities.
The company’s customers include a meat producer
Whalen said midsize businesses can thrive if clients decide to seek out legal expertise at a lower price and avoid higher billing rates. In the meantime, he noted that the company has not only fortified its base, but also broadened its offering.
“We have added talent more broadly, especially in areas such as commercial real estate and development and tax credits,” he said.
Nevertheless, the cabinet remains interested in more important consolidations, he underlined.
“When we look at trends, including the inevitability of new entrants to legal services, we need to think of alternatives to our existing structure. We remain opportunistic and agile, ”he added.