(Courtesy photo)

Baer Crossey McDemus has combined with Cozen O'Connor in a nine-attorney tie-up that includes name partners Andrew Baer, Michael Crossey and Christopher McDemus.

The Philadelphia boutique brings to the locally founded Am Law 100 firm a roster of mid-Atlantic clients, as well as some national clients, in the venture capital, data privacy and cybersecurity space—a boon to Cozen O'Connor's strategic plan, which calls for continued growth in the transactional and corporate practices.

Baer will chair Cozen O'Connor's technology, privacy and cybersecurity practice, while Crossey and McDemus will chair Cozen O'Connor's emerging business and venture capital group.

"We are at the stage of our strategic plan where we continue to build out transactional practices all across the country," Cozen O'Connor CEO Michael Heller said. "For us to be able to expand our corporate practice in the venture capital and tech and cybersecurity space is a huge huge win for us and one that's consistent with our strategic plan."

Heller said that the two firms have been in talks "on and off" for months now, beginning well before the coronavirus pandemic took hold in the U.S. Despite the global recession resulting from the virus, which has forced firms including Cozen O'Connor to institute austerity measures, Heller said he sees the addition as a long-term investment in the firm's future that made the opportunity too good to pass up.

It "shows our willingness to invest in the future and to use our balance sheet to look past the next few months into the next 10 years," he added.

The combination signals the end of Baer Crossey McDemus. Baer and Crossey founded the firm in 2010 with McDemus joining in 2012. Over the last decade, the firm grew every year and employed around 17 lawyers before the combination.

"We had a great eight-year run," Baer said.

The founders had been approached several times, though often found the rate structures of their suitors to be unpalatable. But when Cozen O'Connor approached, the founders saw a firm that would allow them to maintain their boutique practices while allowing them to serve their growing clients, many of which were in need of a wider practice breadth in areas such as litigation and labor and employment. They also appreciated that Heller practices in the venture capital and emerging business space.

"We wanted to be a truly national presence with the ability to represent startups and larger companies with tech and privacy needs," Baer said. "Joining Cozen was a way to get there."

Baer advises companies on technological regulation and data privacy compliance. He represents a wide spectrum of clients from "household names" to startups such as wearable tech company Kinetic.

Before founding Baer Crossey, he had several stints in-house as chief legal officer of health care company Numoda Corp. and counsel at Advanta Bank. He began his career at Wolf Block, which dissolved in 2009, in the midst of the Great Recession—Cozen O'Connor hired a number of Wolf Block lawyers when that happened.

Crossey and McDemus both have built out practices advising early-stage companies and startups including avatar company Genies Inc., home insurance marketplace Young Alfred and Philadelphia-based health care platform Benefix.

Crossey began practicing law at K&L Gates before jumping into a series of in-house roles, including a stint as the first general counsel of payment platform Venmo in 2009. While at Venmo, he began a solo practice that later merged to become Baer Crossey.

McDemus started his career at Cozen O'Connor, then spent several years at Morgan, Lewis & Bockius and some time in-house at various companies. In 2008, he started his own solo practice and later joined Baer and Crossey in 2012.

The six other Baer Crossey McDemus attorneys joining Cozen O'Connor are: Raymond Agran, Chad Cowan, Christopher Dodson, Matthew Klahre, Benjamin Mishkin and Joel Ruffini.

Last year, 675-attorney Cozen O'Connor posted big gains in revenue per lawyer and profits per equity partner.

The Philadelphia-based Am Law 100 firm grew gross revenue by 9.4% in 2019, surpassing the half-billion-dollar mark to reach $517.3 million. At the same time, lawyer head count grew only modestly, driving a 7.9% increase in revenue per lawyer, to $767,000.

Likewise, the firm saw its profits jump, with net income of $173.2 million, an increase of 13.3% from 2018. Profits per equity partner grew by 9.9%, to $910,000, and the firm's profit margin grew by one percentage point, to 33%.

Even as it closes on a significant combination, Cozen O'Connor has not been immune to the pandemic-induced global recession. The firm has asked equity partners to defer a portion of their compensation to the end of the year, between 10% and 20%. Cozen O'Connor also furloughed 2.5% of its administrative staff, all of whom were unable to perform their jobs in remotely. Heller added that the furloughed staff members are still receiving their benefits.

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