After months of talks, Philadelphia-based Pepper Hamilton LLP announced Thursday that it would combine forces with Atlanta's Troutman Sanders to become one of the biggest law firms in the country.
When the merger is effective on April 1, the newly-minted Troutman Pepper will field 1,100 attorneys in 23 offices across the country.
"Why now?" said Pepper's current chairman, Thomas M. Gallagher. "Because now we have the right partner. Because now we are positioned well to do what both firms really treasure, which is providing excellent client service."
Pepper Hamilton has long specialized in Big Pharma clients and medical device manufacturers. Along with the health sciences industry, Pepper also represents technology and "middle-market corporate entities," Gallagher said.
Troutman Sanders is a powerhouse in the energy sector and financial services. "They're well known and well positioned in the Southeast as we are in the Northeast," Gallagher said.
Key practices in both firms include corporate law, litigation, intellectual property, tax and bankruptcy.
Only three geographic areas overlap: Washington D.C., New York City, and Orange County, Calif. Troutman Pepper will have offices in eight of the 10 largest U.S. markets.
Gallagher said he did not foresee any reductions in the number of attorneys.
"Every existing office will come together and serve clients," Gallagher said. "There is so much work to do that the plan is to integrate it all. Over the next year we'll be evaluating the best way to bring the teams together."
In 2016, Pepper Hamilton had been in talks to merge with Reed Smith, a global law behemoth based in Pittsburgh.
Last year was a record-breaker for U.S. law firm mergers, according to analysts at Altman Weil, Inc., the legal industry consultants based in Newtown Square. At least 115 mergers were recorded, up from 106 set in 2018.
The splashiest marriage announcement occurred in December, as Philly's Drinker Biddle rocketed into Big Law's Top 50 in a "merger of equals" with Midwestern powerhouse Faegre Baker. The combination, now named Faegre Drinker, goes into effect February 1 and will field a legal team of 1,300 attorneys.
The big national mergers represent "a push to scale," said Lisa Smith, a principal at Fairfax Associates, the international legal management consultants based in Washington D.C.
"There are benefits that come with size, especially for firms that want to have a national platform," Smith said. "There are costs of doing business that are easier to absorb for bigger firms, especially within the realms of data security, privacy issues and technology. Those alone don't drive mergers, but they are things that mid-sized firms struggle with."
As in the Faegre Baker merger, the Troutman Pepper combination will not favor any one city.
"Nobody really talks about a headquarters anymore," Gallagher said. "But of course, the two biggest offices will be in Atlanta and Philadelphia."
Gallagher will serve as vice chairman of Troutman Pepper. Steve Lewis, currently the managing partner of Troutman Sanders, will serve as Chair and CEO of the combined firm.
Asked why Troutman is getting first billing in the new moniker, Gallagher said the decision was made with "a simple guiding principle."
"Nobody was talking about which names should be considered first, second, or third," Gallagher said. "The only thing that mattered was putting our clients first."
