Stinson Morrison, Leonard Street Strike Midwest Merger
Kansas City, Mo.–based Stinson Morrison Hecker and Minneapolis-based Leonard, Street and Deinard announced Monday they plan to merge in January to create a 525-lawyer operation with 14 offices in the Midwest, Southwest, Mountain West and Washington, D.C.
The two firms' leaders say the combination follows what was the most successful year ever for both. Once joined, the firm will be known as Stinson Leonard Street.
"This gives us an opportunity on each side to extend what we’re currently doing into another geography, across a wider client base, and to strengthen key practices," says Mark Hinderks, the current managing partner of Stinson Morrison, who will comanage the merged entity along with Leonard Street president Lowell Stortz.
The combined firm's core practice areas will include banking, corporate finance, M&A, financial services litigation and energy work. Current Stinson Morrison clients include Bank of America, Cessna Aircraft Co., Hallmark Cards Inc. and Verizon, according to the firm, while Leonard Street lists clients such as Honeywell International, NRG Energy, and the National Basketball Association's Minnesota Timberwolves.
Based on present figures, Stinson Leonard Street would be among the 75 largest firms in the U.S. as measured by attorney head count, according to last year's National Law Journal 350 rankings. The merged firm will operate as a limited liability partnership with roughly 325 partners split into two equity tiers (Leonard Street is currently structured as a professional corporation). Staff layoffs aren't expected once the operations combine, and with only one overlapping office, in D.C., office space redundancy will be minimal, Hinderks said.
According to legal consultancy Altman Weil, there have been 45 law firm mergers announced in the U.S. so far this year. Of those, the majority involve shops with 25 lawyers or fewer being acquired by larger firms. The year's larger combinations include Lewis and Roca's merger with 75-lawyer Rocky Mountain firm Rothgerber Johnson & Lyons, which went into effect at the beginning of the month; Husch Blackwell's July combination with 65-lawyer Austin firm Brown McCarroll; Detroit-based Clark Hill's merger with 82-lawyer Pittsburgh firm Thorp Reed & Armstrong; and a second firm headquartered in Detroit, Dickinson Wright, kicking off the year by combining with 60-lawyer Phoenix shop Mariscal Weeks McIntyre & Friedlander.
Leaders at Stinson Morrison and Leonard Street have known each other for a decade through an informal network of Midwest law firms that meet periodically to provide each other with management advice, said Hinderks. "Beforehand we exchange fairly detailed financial information, then our management teams meet and discuss strategies, approaches to problems, opportunities, in an open and nonthreatening way," he said of the network, which has counted between four and five firms over the years.
Meeting in that setting led to more serious discussions earlier this year, Hinderks and Stortz said, and ultimately culminated in each firm holding partnership votes during their respective partnership retreats Friday.
Hinderks said the two firms have nearly identical metrics in various measures of performance. Stinson Morrison took in $149 million in gross revenue last year, according to The American Lawyer, making it the 165th-highest grossing firm in the country. The firm's profits per partner rose nearly 7 percent, to $540,000, between 2011 and 2012, while the firm's revenue per lawyer reached $530,000. Financial information for Leonard Street, the smaller of the two with 208 attorneys, is not publicly available.
Stortz said that though business considerations were important in his partners' decision to approve the merger, "for us the commitment to diversity, pro bono and community activity were all important drivers in making us feel comfortable and let us know we would enjoy working with each other."