As Fox Rothschild fills in another section of the East Coast with its latest merger, other large firms based in Pennsylvania are also thinking about the Southeast. But finding a match can be a major challenge.

Philadelphia-based Fox Rothschild finalized its biggest acquisition ever last week, when the Am Law 100 firm gained about 125 lawyers across the Carolinas and Georgia from Smith Moore Leatherwood. Chairman Mark Silow said the deal has already resulted in some work, now that clients know the firm has an office in North Carolina, which had long been a geographic area of interest to the firm.

Consultant Tom Clay of Altman Weil said he knows at least a couple of Pennsylvania firms are looking to grow in Atlanta, but “there aren't that many firms in Atlanta of chewable bite size anymore.” Likewise, he said, the Carolinas and Nashville, Tennessee, remain interesting markets to large firms.

Pennsylvania-born firms that already have a presence in one or more of those places include K&L Gates, Dechert, Duane Morris, Cozen O'Connor, Buchanan Ingersoll & Rooney and Ballard Spahr.

Saul Ewing Arnstein & Lehr and Marshall Dennehey Warner Coleman & Goggin both have multiple offices in Florida, but not elsewhere in the Southeast.

G. Mark Thompson, CEO of Marshall Dennehey, said Atlanta is a top city of interest for the firm, while Charlotte, North Carolina, is also on its radar. But the firm isn't actively looking for a merger partner in either city, he said, and has no imminent plans to do so. Although he has spoken with some firms and recruiters in the area, he said.

A lot of self-insureds and insurance companies have offices or headquarters in Atlanta, Thompson said, making it an attractive market for the large insurance defense firm. Additionally, he noted, Atlanta and Charlotte are both very accessible to Philadelphia by flight, making a Southeast expansion more practical than, say, a West Coast expansion.

Michael Heller, CEO of Cozen O'Connor, said his firm's Charlotte office is smaller than he would like it to be. The firm has also pursued opportunities in Atlanta, he said, and just opened an office in Richmond, Virginia. Additionally, he noted, Cozen O'Connor is always seeking to grow in Miami.

“I think there are lots of opportunities in the Southeast, but we're not targeting any cities where we don't already have locations,” Heller said.

Ballard Spahr chairman Mark Stewart said his firm entered the Atlanta market because of a specific practice rather than geography. But it might be a good place to add lawyers if the right opportunity arose, he said.

“We don't have designs on any other office in the Southeast, which is not to say we'd not be interested in adding resources in the Southeast,” Stewart said. “We've talked to some folks in the Southeast, we've talked to some firms in the Southeast, and it seems like a right place” to grow.

South Carolina is home to some major manufacturing operations, like Boeing and BMW, Clay said. North Carolina, meanwhile, sees work spin off from universities and health care, as well as a major banking hub in Charlotte. And Georgia, Clay said, has seen banking and real estate grow, while agriculture remains a major industry in the southern part of the state. Nashville also has a booming health care industry.

However, Clay said, so many firms have consolidated in the last several years that only a few strong acquisition targets remain in the Southeast. Among those few, he said, “There's still a cultural issue of, do they want to be a part of a Northeast firm?” But there could be a wave of mergers if someone answers that question with a yes, he said.

“If one of those firms broke ranks and did a deal with a prominent, top-end firm, all the others would have to think about it,” Clay said.

Law firms in the Carolinas and Georgia have been hot targets for years.

According to data from Altman Weil MergerLine, which tracks law firm combinations, 24 law firms based in North Carolina or South Carolina were acquired between 2007 and 2016. And 14 Georgia-based firms were acquired in that decade as well.

Those deals included some hefty mergers by Am Law 200 firms. K&L Gates and McGuireWoods both acquired North Carolina-based firms of well over 100 lawyers in 2008, and Williams Mullen acquired a midsize firm in North Carolina the year before that.

In Georgia, Dentons and Eversheds Sutherland made major acquisitions in 2015 and 2016, as well as Bryan Cave in 2008.

Meanwhile, law firms based in the South and Southeast have also been consolidating with one another, like Alabama-based Burr & Forman's recently announced combination with South Carolina's McNair Law Firm. And South Carolina-based Nelson Mullins expanded its reach in Florida earlier this year by acquiring Broad and Cassel.