While the Drinker Biddle/Gardner Carton law firm merger closed Wednesday; Dewey Ballantine and Orrick called off their nuptials yesterday. The papers are all over it: The Recorder, New York Times and Wall Street Journal (paper and Law Blog).
Many reasons are given; the WSJ Law Blog has part of the firms’ joint statement (which interestingly is not on either firm’s web site): “No one issue led us to this point, and each firm leaves this process with great respect for the leaders and partners of the other.”
Certainly a central fact is this, as reported by The Recorder:
More than 10 partners left Dewey since news of merger talks surfaced in October, including two highly regarded and high-grossing M&A lawyers, Jack Bodner and Michael Aiello. Dewey’s M&A practice was one of Orrick’s primary targets in the deal that had been expected to close this month.
Why does a GC or in-house counsel care? Look at the quote immediately above: Orrick had targeted Dewey’s M&A practice. Are Dewey M&A partners firm assets? Maybe, but apparently not fixtures. They can move overnight.
And what about Dewey’s clients, including the highly coveted M&A or private equity work? Are they also firm assets? Do they think they will get better service from a larger, rebranded firm?
Some law firm mergers are sound and strategic. Many are defensive, and may be a sign of weakness.
Law firm clients care because ultimately they are picking up the tab. Without being invited to the party.