October 2, 2013
The new firm, to be called Stinson Leonard Street, is expected to maintain offices in both locations. Even so, it ends Leonard, Street and Deinard’s 91-year history as an independent fixture of the Minnesota legal community.
Both law firms were quick to insist that this was not a “merger of survival.”
That may be the case, but it is difficult not to assess this news against the backdrop of increased merging and acquiring among large law firms.
So far in 2013, there have been about 50 or so noteworthy mergers between law firms or acquisitions of one firm by another, according to an estimate by the Wall Street Journal.
This is not the first time this trend has played itself out in The City of Lakes. In 2011, another one of Minnesota’s largest law firms, Faegre & Benson, merged with Baker & Daniels LLP of Indianapolis to create Faegre Baker Daniels LLP.
(Another interesting sidenote: Stinson Morrison Hecker itself is the product of a merger, having been formed in 2002 by the melding of Morrison & Hecker and Stinson Mag & Fizzell.)
Large law firms are merging with one another for several reasons:
- Demand for legal services is still soft, so merging with counsel for another major client (Faegre represented Target and Baker & Daniels represented Eli Lilly, for example) adds a measure of security that is otherwise hard to find in today’s legal climate.
- If you set aside the loss of corporate identity and the potential casualty of pet pro bono projects, then there does not seem to be much risk to law firms merging. Notice that I said “to firms.” For associates, it can create anxiety because if one office does not fare well after the merger, the newly merged super-firm could survive after laying them off and closing that office. That is harder for standalone firms to do, since it could mean closing up shop entirely, and that is a difficult decision to make.
- There is also the cost-sharing component. Law firms continue to be expensive to run, a fact that some people attribute to the legal industry’s reluctance to allow non-attorney business professionals to assist industry players in slimming down and toughening up.
In any event, it will be interesting to check in on this merger in two or three years’ time. Specifically, will Stenson Leonard Street still have a “distributed headquarters” in both Minneapolis and Kansas City, or will it have simplified down to one city? And which other firms will have blended tighter by then?
Update: According to the ABA Journal, 58 law firm mergers have been announced so far in 2013. That’s a 41 percent increase over this time last year. The Leonard, Street, Deinard/Stinson Morrison Hecker is the largest of all mergers announced this year.