Credit: NESPIX/Shutterstock.com

A number of national legal industry trends took hold in the Pennsylvania market this year, as firms looked to gain market share by head count growth and acquisitions.

Of course, that included a number of mergers, as law firm combinations become more frequent industrywide. But it wasn't just the local players making strategic moves. Some out-of-state firms looked to strengthen their ties to the local legal scene by recruiting longtime partners from area firms.

And in this round of musical chairs, as tends to happen, a couple of firms found themselves out of the game, breaking up and winding down.

Out-of-Towners Making Moves

Several firms based outside Pennsylvania took an interest in the market in 2018, either entering the state for the first time or significantly bulking up their existing presence. Some of those moves included partners who had been leaders within their Pennsylvania-based former firms.

The biggest splash was arguably made by Holland & Knight. The Florida-based Am Law 50 firm launched its Philadelphia office in July with 11 partners from Reed Smith. By September, its lawyer head count had grown to 30 in Philadelphia.

The talks got started as lawyers from Reed Smith's Philadelphia office became more interested in potential lateral moves, as the Pittsburgh-based firm increasingly focused on a global strategy. Holland & Knight, meanwhile, had taken an interest in Philadelphia as part of a strategy for domestic growth.

Am Law 200 firm Armstrong Teasdale added a Philadelphia outpost to its Midwestern-based platform in September, taking a group of seven from Montgomery McCracken Walker & Rhoads. The group included Richard Scheff, who had been Montgomery McCracken's executive chairman.

Scheff said he was looking to join a firm with a strong intellectual property practice, which he saw Montgomery McCracken as lacking.

Long Island-based midsize firm Milber Makris Plousadis & Seiden also set up its first Pennsylvania shop over the summer, taking a group of defense litigators from Powell Trachtman Logan Carrle & Lombardo. The latter firm was in the process of winding down.

Also in July, Texas-based Akin Gump Strauss Hauer & Feld grew its existing Philadelphia office by five partners, recruiting them from locally based Drinker Biddle & Reath. Seamus Duffy, Michael McTigue, Meredith Slawe and Kathryn Deal had all previously served in leadership roles at Drinker Biddle.

The class action defense litigators counted organizations such as Comcast, Chesapeake Energy Corp. and The Franklin Institute among their clients.

Drinker Biddle saw another group of Philadelphia lawyers depart in April as well. The 14-lawyer commercial litigation team moved to Cozen O'Connor, which was coming off an active year of lateral hiring in 2017.

And across the state, a Midwestern firm with a focus on the midmarket doubled its Pittsburgh office in 2018. Ohio-based Vorys, Sater, Seymour and Pease added 10 lawyers through its merger with IP boutique Beck & Thomas in April.

“Our law firm has a strategic focus on the IP area,” Daren Garcia, head of the Vorys Pittsburgh office, said. “Pittsburgh is certainly a hot IP market and the Beck & Thomas firm came highly recommended to us.”

Mini-Merger Mania … and One Not-So-Mini Deal

Beck & Thomas' combination with Vorys was just one of several instances of small Pennsylvania firms merging with larger shops.

Also in the second quarter of the year, Salzmann Hughes, based in Chambersburg, acquired two lawyers, as well as staff, from Campbell & White in Gettysburg. And 78-lawyer Leech Tishman Fuscaldo & Lampl in Pittsburgh absorbed two-lawyer Kisner Law Firm in April.

After the second quarter of 2018, Altman Weil had pegged Pennsylvania as one of the most active markets for law firm mergers, given that five of the 21 deals announced that quarter involved at least one Pennsylvania firm.

Earlier in the year, Pittsburgh's Rothman Gordon absorbed another local firm, three-lawyer Samuel J. Cordes & Associates. And growing outside the state, Pennsylvania-based firms Dilworth Paxson and Buchanan Ingersoll & Rooney acquired groups in New Jersey and Miami, respectively.

Later in the year the small combinations continued as Cipriani & Werner added seven lawyers and a new office in Lancaster,  by acquiring employment firm Devine Law Offices. And Stevens & Lee, based in central Pennsylvania, tacked on a five-lawyer practice that focused on employee stock ownership plans.

But the most active Pennsylvania-based acquirer was Fox Rothschild, which completed two small mergers in Denver and San Francisco, a midsize merger in Chicago and Delaware, and its largest ever merger in the Southeast.

The latter deal, a combination with Smith Moore Leatherwood, added about 130 lawyers to Fox Rothschild, which also picked up six offices in the Carolinas and Atlanta.

Breaking Up and Spinning Off

While some firms came together in mergers in 2018, a few groups of partners decided it was time to close up shop and go separate ways.

Toward the end of 2017, leadership of central-Pennsylvania firm Rhoads & Sinon said the firm was seeking a merger partner. But a deal never came together, and managing partner Drake Nicholas confirmed Jan. 2 that the firm was in the process of dissolving. The remaining lawyers dispersed to other Pennsylvania law firms over the following days and weeks.

That same day, Barley Snyder announced the hire of 10 lawyers and nine staff from Rhoads & Sinon, and three more lawyers went to Stevens & Lee. Other groups found landing spots at Eckert Seamans Cherin & Mellott; Saxton & Stump; and Post & Schell.

And as noted above, King of Prussia-based Powell Trachtman confirmed in May that its partners were ready to move on, bringing an end to the 30-year-old firm.

They went in several different directions. One group joined Wisler Pearlstine in Blue Bell to form a new venture focused on providing legal services to midmarket and small companies. Another started an entirely new law firm, Brehm Nofer & McCarter, to focus on representing design professionals in insurance defense and products liability matters. Others made lateral moves to various firms.

READ MORE:

As Non-Pennsylvania Firms Invade Philly, Will Native Firms Shrink?

How Holland & Knight Built a Philadelphia Office on Reed Smith Talent

Law Firm Merger Mania Strikes in Pennsylvania

Small Firm Struggles Make for Midsize Firm Growth