Locke Lord, a Texas-based firm with a 135-year history, is in merger talks with Georgia-founded Troutman Pepper Hamilton Sanders, both sides have confirmed.
A statement issued by both firms confirming the talks reads simply:
“Locke Lord and Troutman Pepper can confirm they have entered into discussions about a possible combination. Our first priority is delivering exceptional legal services to our clients, and as such, we will have no further comments at this time.”
Kent Zimmermann of the Zeughauser Group, who has advised Troutman Pepper in the past, was less reserved.
“I’m excited about this,” said Zimmermann. “I think this has the potential of being one of those Harvard Business School case studies on strategic growth in law firm management.”
This is Troutman Pepper’s second serious effort to combine with a Texas-based firm. In 2018, they were in merger talks with Dallas-based Winstead. Those talks collapsed. Likewise, Locke Lord is no stranger to merger. Known half-century ago as Locke Purnell Rain Harrell, Locke Lord became the firm of that name in 2007 when the two Texas firms, Lord Bissell & Brook and Locke Liddell & Sapp, combined.
The basic metrics of the potential merger are simple.
The merger talks, first revealed by The American Lawyer on Thursday, would create a firm of more than 1,600 lawyers, ranking it approximately 28th in the Am Law 100 rankings.
Both firms have 20 offices, only seven of which overlap. Troutman Pepper has no current offices in Texas.
According to Texas Lawbook 50 research, Locke Lord is ninth largest corporate law firm operating in Texas, with a current headcount of 233 lawyers, the same number the firm reported last year. In revenues, the firm ranks 12th in Texas, bringing in $221.6 million in 2023, which is $1M more than the year before. The firm’s profits per equity partner in Texas increased by more than seven percent to $1.297 million.
While Locke Lord grew its Texas revenues slightly, overall firm revenues declined slightly last year, from $500 million in 2022 to $497.6 million, according to Lawbook 50 data.
Beyond Texas, Locke Lord has offices in Florida, London and Brussels where Troutman Pepper has none. Troutman Pepper, on the other hand, has three offices in California (Orange County, San Diego and San Francisco), as well as four in Pennsylvania where Locke Lord does not.
According to The American Lawyer, Troutman Pepper has roughly twice as many lawyers as Locke Lord, with a posted firmwide revenue per lawyer in 2023 of $999,000, compared with $895,000 for Locke Lord. Troutman Pepper’s profits per equity partner were $1.626 million, compared with $1.175 million for Locke Lord.
Zimmermann, however, says the benefits of the merger run beyond the math. The value to both firms is the benefit in depth and talent and broadening of structure within the practices they share.
“If you look at the Am Law 100 and you count up Chambers-ranked practices they have, (the combined firms) would rank tenth,” said Zimmermann. “If you rank the number of Chambers-ranked lawyers, they would rank sixth.”
More than that, he said, there would be nearly immediate synergisms within their various practice strengths.
“For instance, in insurance Locke Lord has a strong transactional practice; Troutman Pepper has a strong regulatory and compliance practice. In energy, Locke Lord’s strength is oil and gas; Troutman Pepper is strong in utility, power and renewables,” Zimmermann said.
“There is higher quality of depth and depth of growth in the various practices. It’s simply not every day that you hear of a potential law firm merger of this scale.”
In an interview in January, Locke Lord chair David Taylor told The Lawbook that the firm had “another solid year” in 2023.
“We’re extremely pleased with everything we’ve accomplished as a firm this [past] year,” Taylor said. “In addition, it was an active year for our areas of strategic focus, and we expect that to continue in 2024.”
Although he didn’t mention the possibility of a merger, Taylor was clearly focused on the competition for legal talent.
“The war for talent will continue to wage on,” he said. “We have a very strong foothold in the region and are well known throughout Texas. As more firms look to open or expand in Texas, the emphasis on culture will be even greater. As a highly respected firm with deep roots in the state, we will continue to attract and retain top-notch lawyers who further the firm’s collaborative and collegial culture. We continue to grow strategically in Texas and across the firm.”
Mark Curriden contributed to this report.