Faegre & Benson explores merger
- Article by: DAVID PHELPS
- Star Tribune
- August 12, 2011 - 8:15 PM
Faegre & Benson, one of the largest and oldest law firms in Minneapolis, may soon have a new partner that could give it clout in new markets and synergies in key practice areas.
Faegre and the Indianapolis firm Baker & Daniels confirmed this week that they have been in merger talks for several months.
"We are mutually interested in exploring this combination, which would bring together two successful firms with rich histories and deep ties to their communities," the firms said in a joint statement. "We are in the early stages of our discussions and will continue careful exploration over the next couple of months."
The firms said they do not expect to put a merger proposal for a vote to their respective partners until fall, likely in October. However, legal experts said Friday the firms would not have issued such a statement if the merger talks weren't serious.
"You don't go public with something like that until you are fairly far along," said University of Minnesota law professor Herbert Kritzer.
Faegre, which was founded in 1886, has 475 lawyers in Minneapolis, Denver, Boulder, Colo., Des Moines, London and Shanghai.
Baker & Daniels has 370 lawyers in Indiana, Chicago, Washington, D.C., and Bejing. It also has a public policy and lobbying division based in Washington called B&D Consulting.
The two firms posted combined 2010 revenues of $409 million, which would make a merged firm the 68th largest in the United States. Faegre currently ranks 112th and Baker sits as the 160th largest firm in the country.
"We explore the combination based on its potential for enhancing the value that can be provided our clients," the joint statement said.
Faegre spokesman Adam Severson added, "From an early analysis, we believe there are synergies in health care and life sciences as well as several other practice areas."
Lawyers at the two firms were told about the merger discussions on Thursday and were urged to inform their clients about the possible development.
Severson said it would be premature to discuss a merged law firm's organizational or management structure.
But if the merger is approved, the likely new name for the law firm will be Faegre Baker Daniels, according to legal sources. It also is expected that Faegre's current managing partner, Andrew Humphrey, would become the managing partner of the new 725-attorney firm.
The firms have no overlapping, and thus redundant, office locations in the United States and have an overseas presence in key locations.
"They're complementary in terms of locations," said Kritzer, who teaches the business of law. "The neat thing here is in terms of the international side. Baker is in Beijing, and that is the place to have a foothold in Asia, and London is the place to have a foothold in Europe."
One potential hiccup in a merger is Faegre's 2010 financial performance -- revenues declined 9.4 percent to $256.5 million. The decline dropped its American Lawyer ranking from 95th to 112th.
But that decline was budgeted, Severson said, because of the completion of two "material contingent fee matters."
Profit per partner, a key economic measurement for law firms, was nearly identical at the two firms and both increased in 2010. Faegre's profit per partner was $530,000 and Baker's was $520,000.
"That is a plus," said Kritzer. "Lawyers don't want to see their earnings diluted. The big issue here will be the difference in institutional cultures and the process for blending and merging those cultures."
Dorsey and Whitney, the largest law firm in Minnesota, has 567 lawyers and 2010 revenues of $322.5 million. It ranked 83rd in the American Lawyer 100.
David Phelps • 612-673-7269
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