Drinker Biddle & Reath's Andrew Kassner, left, and Faegre Baker Daniels's Tom Froehle, right.

Two Am Law 100 law firms, Minneapolis-based Faegre Baker Daniels and Philadelphia-based Drinker Biddle & Reath, have voted to join forces after lengthy merger talks, the two firms were poised to announce Wednesday.

The merger, which is set to become official Feb. 1, will create an Am Law 50 firm with more than 1,300 lawyers and consultants across 22 locations in the U.S., U.K. and China.

ALM first reported in November that the two law firms were negotiating. The partnerships each held votes on the deal earlier this month.

The combined firm will be known as Faegre Drinker Biddle & Reath. Drinker Biddle CEO and chair Andrew Kassner and Faegre managing partner and chair Tom Froehle will serve as co-chairs.

"This is a merger of equals from top to bottom," Kassner said, adding that he and Froehle will each spend time meeting with clients of the soon-to-be combined firm.

Froehle said in determining the new firm's brand, they knew "capitalizing on the Faegre and Drinker names is going to be important."

Faegre, with more than 660 lawyers and gross revenue of $512.9 million last year, is slightly larger than Drinker, which had 530 lawyers and $449.7 million in gross revenue in 2018. Drinker had slightly higher profits per equity partner: $916,000, compared to Faegre's $896,000.

Both have enduring connections with the financial services, health and life sciences industries, their leaders said, while Drinker also has strong ties to the insurance and retail sectors and Faegre brings a deep background in food and agribusiness.

Aside from Froehle and Kassner, the new firm's executive leadership team will include partners David Barrett, Gina Kastel and Jack Sperber from Faegre and partners Bill Connolly and Judy Reich and chief operating officer Jane Koehl from Drinker.

While the firm's geographic footprints overlap in three cities—Chicago, Los Angeles and Washington, D.C.—they are otherwise complementary. Drinker will gain a presence in Denver, Indianapolis, Minneapolis, Silicon Valley, London, Beijing and Shanghai. And Faegre will gain new offices in Dallas, New Jersey, New York, Philadelphia, San Francisco and Wilmington, Delaware.

The new firm's largest offices will be in Chicago, Indianapolis, Minneapolis, Philadelphia and D.C.

Prolonged Talks

Froehle and Kassner said they met about two years ago and got to know each over over several months before discussing what a merger would mean for their firms in more detail. They said both firms engaged in strategic planning during that time and determined that combining was "a unique, once-in-a-generation opportunity," Kassner said.

"We had identified expansion as a strategic initiative for us, but we hadn't said it had to be a merger of this size," Froehle said of Faegre.

Kassner said that before opening talks with Faegre, Drinker was open to the idea of a merger given the right opportunity, but it didn't feel pressured to seek out a combination.

As talks continued, they said, it became clear that Faegre and Drinker had similar approaches to client service. Kassner said since ALM reported on the talks in November, client response has been "overwhelmingly positive." The two firms share many clients in common, he said, often in different practice areas, and they encountered "strikingly few conflicts" given the sizes of the firms.

And their rates were "not significantly different," Froehle said, adding, "We don't see this as an opportunity to become a bigger firm and use that as a rationale to charge bigger rates."

As for running the business, they said it was important to have equal representation from both firms on the executive management team, and there was little duplication in the C-suite. In one situation, where both firms had a CFO, Drinker's was already planning to retire, Kassner said.

Asked about other staff, Froehle said both firms have "historically done a good job of re-evaluating staff over time" and will continue to do so. But, he noted, "unlike a lot of other types of combinations, law firm combinations aren't really about expense savings."

In the three locations where both firms have offices, the combined firm will look to move all lawyers and staff together as leases allow.

Truly Equal?

True mergers of equals are not particularly common, especially in Big Law.

That's partly because operational questions don't simply get decided by the larger legacy firm, as it would when a big firm gobbles up a smaller one, said Tom Clay of law firm consultancy Altman Weil.

"When you do one of these things, every single policy, system, procedure, organizational structure is up for negotiation," Clay said, adding that sometimes developing brand new approaches is best.

He said leadership needs to be deliberate in developing a new compensation system and determining who will be in the new firm's partnership. And while having dual leadership sometimes works, he said, it may not be a long-term solution.

While there haven't been many mergers of equals in recent memory, a few examples have stuck.

Kansas City, Missouri-based Stinson Morrison Hecker and Minneapolis-based Leonard, Street and Deinard combined in 2014 to create a firm with 525 lawyers and 14 offices, now known as Stinson.

Womble Carlyle Sandridge & Rice, which was headquartered in Winston-Salem, North Carolina, formally combined with U.K. firm Bond Dickinson in 2017. Womble brought 14 East Coast offices and roughly 500 lawyers to the table, while Bond Dickinson, already the product of a merger between regional firms in the U.K., had about 580 lawyers.

When Missouri-based firms Husch & Eppenberger and Blackwell Sanders voted to merge in December 2007, they both had about 300 lawyers and gross revenue around $130 million. Their respective leaders became co-chairmen, and they decided on their new name by the flip of a coin.

Determining Faegre Drinker's new name was "a conversation," Kassner said. "Both names are very well-respected in their markets," he said.

He and Froehle noted that both of their firms have already gone through transformative mergers. Minneapolis-based Faegre & Benson, which had about 450 lawyers, merged with 320-lawyer Indianapolis-based Baker & Daniels in 2011. In 2007, Philadelphia-based Drinker Biddle merged with Chicago-based Gardner Carton, which had over 200 lawyers.

The firm leaders said they evaluated each firm's best practices and adopted some policies from each firm. And, Kassner said, "there were instances where we said we can both do better."

He said the two firms have remained "very connected to our historical markets" and want to maintain that, but they have spread leaders and c-suite decision-makers around to other offices over the years. The combined firm will have no formal headquarters.

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