The merger of Minneapolis law office Oppenheimer Wolff & Donnelly and the larger Philadelphia-based firm Fox Rothschild follows a national consolidation trend among law firms and could be a sign of things to come in the Twin Cities market.
Effective Monday, Fox will add Oppenheimer’s 82 attorneys to its practice. Oppenheimer, which is one of the 10 largest law firms in the region, has a 129-year history in the area.
“We treated this as a business imperative that eventually we wanted to increase our scale and increase our offerings and bolster our depth,” said Brad Keil, Oppenheimer’s managing partner. “We were patient about it and we waited until we got the right deal.”
The firm felt it needed to add more breadth in different practice areas such as health care, Keil said.
The deal also was strategic for Fox. It is the most significant merger to date for the firm, increasing the number of attorneys to more than 700 and expanding its geographic footprint.
“Establishing a strong presence in the Upper Midwest is an important component in Fox’s overall strategic growth plan,” said Mark L. Silow, Fox’s firm-wide managing partner, in a statement.
Fox has grown significantly in recent years. Last April, it added a team of gambling, corporate, litigation and real estate attorneys in Chicago. In October 2014, the firm merged with 18-lawyer David & Goodman PC to open its Dallas office. Fox now has offices in a dozen states, including California, Colorado, Delaware, Florida, New Jersey and New York.
Oppenheimer was established in 1886. The firm is known for its work in commercial litigation, financial services, medical technology, mergers and acquisitions, real estate finance and securities, with specialty practices in areas such as health care litigation.
In the late 1990s, Oppenheimer grew rapidly to 350 lawyers and had offices across the country, including in New York and Los Angeles, and several European capitals. After a tumultuous time when dozens of patent lawyers in its Silicon Valley offices jumped ship and some other offices were underperforming, the firm’s partners in Minneapolis decided to pare down the firm and refocus.
In 2014, there had been preliminary discussions of a possible merger between Oppenheimer and Minneapolis firm Lindquist & Vennum. Conflicts between clients apparently derailed the deal. Now, Oppenheimer’s revenue for 2015 is on track to exceed revenue from 2014.
“We probably because of our past [with offices in multiple cities] had a little bit more skepticism,” Keil said about growing via a merger. “But I think it allowed us to have a really robust process and to ultimately get really comfortable that the footprint Fox has, and the plans that Fox has for continued growth fit really well with what we want to do with our clients.”
The Fox agreement aligns with a surge of combinations across the country. There had been 68 deals announced through the end of September 2015, the highest number recorded for the first three quarters of the year in the nine years that legal consulting company Altman Weil has been compiling merger data.
“This announcement is consistent with a national trend,” said Kent Zimmermann, a Chicago-based management consultant with a focus on law firm mergers with Zeughauser Group, which provides consulting for law firms.
Combinations can be the fastest, least expensive way to grow, Zimmermann said. Clients are using fewer and fewer firms, so many firms are choosing to merge and deepen their expertise.
There is an increased interest in the Twin Cities market where there is a strong base of large and middle market companies that could generate a lot of work for law firms, he said.
As local clients continue to grow and expand their business into other locations, firms need to grow geographically, as well, said Skipp Swayze, chief financial officer for Minneapolis-based law firm Dorsey & Whitney. “The trend now is to go big or stay home, quite frankly.”
Dorsey is “always looking at opportunities to grow,” Swayze said.
“I don’t think the [consolidation] trend is going to stop,” he said. “If anything, I can see it accelerating.”