In 2017 and 2018, North Texas firm Hiersche Hayward Drakeley Urbach engaged in merger talks with four different out-of-state firms, but in each case negotiations ended as the non-Texas firms became more interested in cherry-picking laterals than fully combining.

But as 2019 winds down, the midsize firm based in Addison, just north of Dallas, announced that it plans to close at the end of the year, when nine of its lawyers move to Spencer Fane's Plano office and four others join Mayer LLP in Dallas. Founder Jerry Hiersche will retire after he completes the wind-down.

The significant lateral moves come more than a year after the firm's lawyers decided to take a rest from the merger talks that had become time-consuming and were ultimately unsuccessful, Hiersche said.

"In '17, '18, we spent a bunch of time being courted by people. They were legitimate. They were competent. I never felt they were that serious about wanting to merge. They [say they] want to merge, and then [decide] they just want to just take a whole lot of people with them," he said.

Hiersche Hayward's experience in the active Dallas legal market illustrates the challenges local small and midsize firms have faced when out-of-state firms scramble to establish a presence in Texas by merging, acquiring or aggressively hiring.

James Drakeley, who practiced at Hiersche Hayward for 39 years and is moving to Spencer Fane, said the heated market in Dallas is actually a good thing for individual lawyers because it provides new opportunities, even though nothing worked out for his firm as a whole.

"It speaks well for our community in Texas and Dallas in particular," he said.

|

Merger Talks Don't Succeed

Founded in 1980, Hiersche Hayward set up shop in then-rural Addison, a location that became "right in the middle of everything" once the Dallas North Tollway expanded, Hiersche said.

The firm grew, hitting about 30 lawyers around 1986, by doing a large amount of real estate work, representing banks and developers. But after the savings-and-loan crisis, the firm shifted its practice to litigation, Hiersche said. And in the early 2000s it added employment litigation for management and C-level employees, and later developed tax and business expertise, he said.

Hiersche first set his retirement plans in motion in 2015. But he put that decision on hold after his wife became ill and eventually passed away in 2016.

The firm had been approached by potential merger partners over the years, Hiersche said. And from early 2017 to mid-2018, it entertained serious talks with four out-of-state firms. Hiersche declined to identify them, but said they were all headquartered in different cities—St. Louis, Detroit, Atlanta and Oklahoma City.

"Our premise was to merge," Hiersche said, but when none of those potential deals worked out, the firm's lawyers put the idea on hold.

Around that time, in the summer of 2018, Hiersche said, a handful of lawyers left for other opportunities. In his view, some midcareer lawyers came to the conclusion that their practice would work better at a firm with a larger platform than Hiersche Hayward's one-office shop.

The lawyers who departed during the summer of 2018 included Jason Katz, who moved to Carrington, Coleman, Sloman & Blumenthal as a partner; video gaming trademark lawyer Wade Cloud, who joined Munck Wilson Mandala as a partner; Russell Mills, who moved to Bell Nunnally & Martin as a bankruptcy restructuring partner; and trial lawyer Craig Harris, who joined Munsch Hardt Kopf & Harr as a trial shareholder.

Harris said his departure was not related to any merger prospects, and he moved to Munsch Hardt after nine years at Hiersche Hayward because his practice had "outgrown" the Addison firm.

"It was a very good firm [with] very good lawyers," Harris said of his prior firm.

Other lawyers who departed in the summer of 2018 did not immediately respond to calls for comment.

Drakeley said he and some others started talking to Spencer Fane earlier this year, prompted by a headhunter, and it became clear the firm would be a good home for their litigation and business practices. Spencer Fane, which moved into Texas in 2016 by opening an office in Dallas, offers a larger practice offering and broader geographic reach, he said.

He said the group also likes Spencer Fane's Midwest culture, its commitment to growing in Texas, and the caliber of its management.

Drakeley said the nine-lawyer group decided it was best to make a lateral move after learning firsthand how difficult it is to strike a merger deal while also pleasing everyone at the firm. "It was just difficult to find a fit and we stopped it," he said.

For Hiersche Hayward's four-lawyer medical malpractice group, a similar fit was found at Mayer LLP in Dallas, where it will establish a health care practice.

The medical malpractice group operated as a unit at Hiersche Hayward, partner M. Kenneth Patterson said, with the firm providing many cross-selling opportunities. Once the Spencer Fane deal came together, Patterson said, his group talked to a number of "excellent" firms. He said Mayer won out because it will allow his group to avoid client conflicts, and provides the best opportunity to stay together as a unit.

"It was Mayer's entrepreneurial and energetic approach to the practice of law that really excited us," said Heather Kanny, another Hiersche Hayward lawyer who will join Mayer as a partner on Jan. 1. Kanny said the group is also eager to move into downtown Dallas.

As for the 75-year-old Hiersche, he recently remarried and is looking forward to retirement once he completes the task of closing down Hiersche Hayward.

"I'm real satisfied [with] how my career has gone. I wish everyone had the same kind of feeling as they look back on their career," he said.

|

Read More

Midwest Firm Spencer Fane Continues Texas Expansion, Taking 9 From Addison Firm