© 2018 The Texas Lawbook.
By Mark Curriden
(June 5) – Two large, corporate southern law firms – Dallas-based Winstead and Atlanta-based Troutman Sanders – are involved in merger discussions, The Texas Lawbook has learned.
Multiple lawyers familiar with the talks told The Texas Lawbook that the merger conversations are “way beyond preliminary” and are described as “serious, but far from a done deal.”
A small group of partners from Winstead have visited with Troutman leaders in Atlanta and a handful of Troutman partners have traveled to Texas to meet with Winstead folks, according to attorneys close to the discussions.
“I think both sides are serious and interested, but there is still a lot of work to be done to get it to the next step,” said a lawyer who spoke on the condition of anonymity. “No announcement should be expected next week, next month or maybe not even for a few months.”
If Winstead and Troutman were to merge right now, the combined firm would have about 850 lawyers in 19 offices with annual revenues of more than $700 million.
Winstead has seven offices – all but one are in Texas. The one non-Texas office is in Charlotte, where Troutman also has an outpost.
Three other large Texas-based firms have already merged with larger out-of-state law firms this year. Hunton & Williams merged with Andrews Kurth Kenyon. Foley Lardner merged with Gardere. And Strasburger & Price merged with Clark Hill.
Winstead Chairman David Dawson declined to discuss any specific merger discussions involving the firm.
“We talk to a lot of different law firms from around the country,” Dawson told The Texas Lawbook. “We are regularly approached by law firms of all sizes interested in a combination and moving into Texas.”
Troutman Sanders definitely fits that description.
In an interview in February with The Daily Report in Atlanta, Troutman managing partner Stephen Lewis made no bones about his interest in expanding to Texas.
“It’s a place where we’ve got multiple practice areas with lots of clients encouraging us to get to,” Lewis said. “We are willing to go quickly if we find the right group, but we are willing to be patient, too. We want a group that is a cultural fit and a good fit for our practice.”
Lawyers familiar with the discussions say that there are a number of obstacles that the two firms must address, including differing compensation and pension systems and a disparity in their revenues per lawyer and profits per partner.
Winstead has 320 lawyers and has revenues per lawyer of about $655,000, according to Texas Lawbook estimates. Troutman Sanders reports revenues per lawyer of about $750,000.
Both firms have weeded out under-performing partners during the past year and have increased their profits per partner to more than $1 million, according to The American Lawyer. Troutman, for example, closed three offices in China in 2017 and had nearly a dozen long-time partners retire.
Another factor driving the two firms is growth in the energy sector.
Troutman Sanders has represented clients in the alternative energy industry and added three partners last year who specialize in oil and gas pipeline regulatory work.
“The problem is that there are fewer and fewer Texas based corporate law firms left to do a merger,” according to a lawyer familiar with the Troutman-Winstead discussions. “If you really want to combine with a larger Texas firm, the options and time are running out.”
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