BigLaw mergers don't necessarily impress GCs; are some McKenna partners also balking?
Several BigLaw firms are in merger talks that could produce BiggerLaw Firms—with the aim of producing seamless legal services for their corporate clients.
But some general counsel interviewed by the Wall Street Journal (sub. req.) question the value of megamergers. “Some top legal officers at Fortune 100 companies say the consolidation craze leaves them cold,” the story says. “Others remain agnostic, but point out that size or geographic reach is no guarantee of quality. And they caution that megamergers can bring unwelcome distractions that sometimes reduce efficiency, and increase legal bills.”
CVS Caremark general counsel Thomas Moriarty and Hewlett-Packard general counsel John Schultz both told the Wall Street Journal that they hire lawyers based on their individual reputation, rather than that of the law firm. And IBM general counsel Robert Weber says he’s not sure why a bigger firm is better.
“I’m pretty skeptical about the value these big mergers give to clients,” Weber told the newspaper.
The story says big mergers could be distracting to the lawyers and could produce more client conflict. On the plus side, megamergers can produce economies of scale, increase geographic reach, and boost specialty practices.
Among the firms considering merger: Orrick Herrington & Sutcliffe and Pillsbury Winthrop Shaw Pittman; and Dentons and McKenna Long & Aldridge.
The Daily Report (sub. req.) reports today, however, that McKenna’s chairman reportedly delayed a partner merger vote on Friday because some partners wanted more information; a supermajority is needed to approve the deal. The source for the story was an unidentified McKenna partner.
The voting period extends until Nov. 14. Both firms told the Daily Report it is premature to comment.