- Uncertainty over Work from Billionaire Families Makes Midsized Firms Attractive Merger Targets
Uncertainty over Work from Billionaire Families Makes Midsized Firms Attractive Merger Targets
Posted Jul 30, 2012 9:53 AM CDT
By Debra Cassens Weiss
Two midsized law firms in Chicago are getting regular phone calls from firms that see them as attractive merger targets.
Both firms—Neal Gerber & Eisenberg and Gould & Ratner—rely heavily on work from billionaire families, Crain’s Chicago Business reports. Gould & Ratner does work for the Crown family, whose patriarch Lester Crown is 87 years old. Neal Gerber does work for the Pritzkers, but the amount of work is reportedly declining.
Uncertainty about future work for the families puts the firms in play as potential merger partners, increasing rifts as younger partners are more open to a deal than older ones who don’t want to give up control, the story says.
The article outlines challenges faced by Neal Gerber & Eisenberg. From 2008 to the beginning of the year, the firm had lost about 20 percent of its lawyers. (It has since picked up 13 lawyers.) The story sums up the problems this way: “People say [Neal Gerber has] lost about half its Pritzker family business as a result of the family feud; another rich client has sued it for malpractice and breach of fiduciary duty; rainmakers have left; and the real estate crash hit it hard. Neal Gerber's challenges are mirrored at many mid-sized law firms, as clients clamor for cost cuts, management ages and partners debate merger options.”
The firm released this statement to Crain’s: “Our financial performance remains strong; we have strong client relationships and a solid reputation for providing value to our clients.”