The upcoming merger of Duane Morris with Satterlee Stephens is the first major intra-regional combination involving northeastern U.S. law firms with at least 50 lawyers in about two years.

The last time the region saw merger of this magnitude was in 2018, when the Washington-based law firms of Venable and Arent Fox merged with Fitzpatrick Cella Harper & Scinto of New York and Posternak Blankstein & Lund of Boston, respectively, according to data collected by consultancy Altman Weil.

Similar to Duane Morris and Satterlee Stephens—an 800-lawyer Philadelphia firm merging with a 65-lawyer New York firm—the Venable-Fitzpatrick and Arent Fox-Posternak deals involved 400-plus lawyer firms scooping up firms that had at least 50 lawyers at the time.

Last year did see Dentons announcing that, as a part of its strategy to become what it calls the first national law firm in the U.S., it was combining with Pittsburgh-based Cohen & Grigsby. But while Altman Weil lists Dentons as a New York-based firm, the majority of its lawyers are located overseas, and Pittsburgh is as much Midwestern as Northeastern.

In terms of mergers, 2019 was the year of the Midwest, and the upper Midwest market of Minneapolis in particular. Apart from Dentons' moves into the Midwest and Mid-Atlantic regions with its so-called "Golden Spike" strategy, the other three large mergers that were announced in 2019 centered around Minneapolis-based law firms: Faegre Baker Daniels with Philadelphia's Drinker Biddle & Reath; Kansas City's Lathrop Gage with Gray Plant Mooty; and Cincinnati's Taft Stettinius & Hollister with Briggs and Morgan Minneapolis.

Given the maturity and relative saturation of the Northeast legal markets, the dearth of big recent mergers inside the region isn't surprising. But the pressures law firms are feeling to scale up are being felt by all firms regardless of where they're based, including highly competitive markets like New York, said Kent Zimmermann, a consultant at Zeughauser Group who advises law firms on mergers and strategy.

Zimmermann advised Duane Morris on its strategy leading up to its merger with Satterlee Stephens, but he didn't work on the merger.

"It's not every day you see a firm of Satterlee Stephens' profile and quality in a higher rate market like New York combine with another firm. That makes this deal stand out," Zimmermann said. "Firms of their profile and quality are approached often and say no often."

The combined Duane Morris and Satterlee Stephens firm is estimated to bring at least $530 million in annual gross revenue. Adding Satterlee's lawyers to the firm is expected to increase Duane Morris' ranks in New York by 60%.

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Duane Morris, NY-Based Satterlee Stephens To Merge in February