Atlanta-based Troutman Sanders definitely wants to expand into Texas and Dallas-based Winstead clearly wants to partner with a larger out-of-state law firm, but it appears that any such deal will not be with each other.
The Texas Lawbook has learned merger negotiations between the two major corporate law firms ended last month and both firms are looking elsewhere for possible partnerships.
Lawyers for both firms, speaking on the condition that they not be identified, say that their respective law firms decided that a merger did not make sense.
Winstead lawyers viewed Troutman’s proposed plan for a merger more as a takeover or acquisition of Winstead instead of a merger of equals, according to lawyers familiar with the discussions.
Winstead Chairman David Dawson said the firm has decided that it will not publicly discuss merger discussions. In past interviews, Dawson said the firm gets many inquiries from national law firms interested in entering into the Texas market.
“Winstead is a strong law firm in a very strong legal market,” Dawson told The Texas Lawbook in an interview earlier this year. “We talk to a lot of different law firms from around the country. We are regularly approached by law firms of all sizes interested in a combination and moving into Texas.
“We listen to the offers and then we decide what is best for our lawyers and our clients,” he said.
Multiple lawyers familiar with the talks told The Texas Lawbook that the merger conversations went “way beyond preliminary,” but that each firm wanted more from the other than was being offered.
Three large Texas-based firms merged with larger out-of-state law firms already this year. Hunton & Williams merged with Andrews Kurth Kenyon. Foley Lardner merged with Gardere. And Strasburger & Price merged with Clark Hill.
Lawyers familiar with the two law firms say that both remain open to combinations with others.
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.”
Law firm mergers are highly complex. There are a number of obstacles that firms must address, including differing compensation and pension systems, disparities in their revenues per lawyer and profits per partner, future leadership and law firm culture.
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.