James Goodnow of Fennemore Craig. Photo by Travis Neely

Two midsize firms in the Mountain West and California, Fennemore Craig and Dowling Aaron, have voted to merge to create a 180-lawyer practice with 10 offices.

The merger, effective Oct. 1, was announced Tuesday, after the firms' lawyers voted to approve the deal earlier this month. The tie-up would create a combined firm with up to about $95 million in combined gross revenue, including about $20 million from Dowling Aaron, said Fennemore Craig's CEO, James Goodnow, who will remain chief executive of the combined firm.

Fennemore, which has about 130 lawyers, and Dowling Aaron, with about 50 lawyers, decided to merge, despite the pandemic and remote-working environment, because the firms' practice areas, cultures and finances aligned, he said. The combined firm will have a base of roughly 6,000 clients, across all practice areas, he noted.

Dowling Aaron, with its four offices in California, has a strong agricultural legal business, as the state's Central Valley is the largest food-producing region in the United States, Goodnow said, noting the region is also a water hub for the western United States.

Fennemore, meanwhile, has a strong cross-border practice with agriculture business and has a "deep bench of water law" attorneys.

"We're going to be a dominant player in agriculture business and water law in the western U.S," he said. "It's going to open the doors to more opportunity."

The firms have no duplicate offices, he said. Dowling Aaron has offices in Fresno, Sacramento, Bakersfield and the Central Coast. The 135-year-old Fennemore Craig has six offices in Arizona, Colorado and Nevada, including Phoenix, Denver, Las Vegas, Reno, Tucson and Nogales.

The firms' lawyers started talking last fall, he said. While the merger talks slowed this year during the pandemic—when offices closed and lawyers worked remotely—the firms were determined to close the deal, he said.

"For us, it [the pandemic] did slow the process a little bit, but we didn't believe it should stop. This is a great combination that has strategic benefits for us and our clients," he said, declining to name particular clients of either firm.

The deal contrasts with the national trend of law firm mergers and acquisitions coming to a halt. "The reason you're seeing slowing M&A in the legal industry is because lawyers, by nature, are risk-averse," Goodnow said, but adding, "I would argue that this is exactly the time firms need to be acting boldly and strategically. We're going to have lots of new business opportunities."

"When I think about the pandemic, I don't think, 'let's curl up in a ball,'" Goodnow said. "I think you have to be much more proactive about finding ways to create work, finding ways to distinguish yourself from other firms and that's how we approached [the merger] with Dowling Aaron."

He noted that neither firm sought the merger out of necessity, by seeking a lifeline. "We're both coming from a strong position," and if the deal didn't happen, "both firms would continue to be strong. … But we realized that this really was a very unique opportunity where we're able to do more together than we do independently."

Dowling Aaron's president, Leigh Burnside, will join the new firm's management committee, and Fennemore's Sarah Strunk will continue as chair of the firm's board of directors. Dowling Aaron chair and partner Richard Aaron will continue in a senior position within the new firm.

The combined firm will have about 350 people, including lawyers and staff. Goodnow said the firm isn't planning on any personnel "reductions" after the merger, and he's hopeful all attorneys will move to the combined firm, noting the deal had broad support.

Besides agribusiness and environmental law, the firms noted that the merger will increase practice capabilities in business and finance, mergers and acquisitions, real estate, construction and health care. Significant during the pandemic, it will also increase their bankruptcy, estate planning, ERISA and benefits, labor relations and employment law practices, the firms said.