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Consolidation, multi-jurisdictional practice top issues for firms

Regional, national, international firms choosing Mississippi

As corporations dot the U.S. and other countries, so follows their attorneys. So it may be understandable that consolidation of law firms is hot, and that multi-jurisdictional practice is one of the top issues confronting the American Bar Association and other groups.

“I think international law is going to be something we’ll all have to be familiar with as time passes,” said Dick Bennett, president of the Mississippi Bar and partner with Bennett Lotterhos Sulser & Wilson, PA. “Multi-jurisdictional practice based on reciprocity and other arrangements is one of the top issues confronting the American Bar Association and other groups.”

Bradley Arant Rose & White LLP is one law firm in a long list of regional, national and even international firms that recently set up shop in Mississippi. The 130-year-old client-driven firm has more than 170 lawyers and 21 practice groups that specialize in virtually every area of the law. Offices are located in Birmingham, Huntsville and Montgomery, Ala., Washington, D.C. and now Jackson with headquarters in Birmingham.

Like other regional and national firms who have put offices in Mississippi, Bradley Arant found Jackson to not only be a natural fit, but a compelling need for the largest firm in Alabama, said Mike McKibben, chairman of the litigation group in Birmingham and a partner. They merged with the Jackson office of Lake Tindall, LLP April 1.

McKibben said the institutional clients and regional and national businesses for whom Bradley Arant does significant work are looking more and more to limit the number of law firms they work with on a nationwide basis.

“So if you wish to continue to do business with those clients, and that’s the type of sophisticated high-level work any lawyer would do, we think you have to continue to render services on a regional basis. That’s one reason we opened the Jackson office,” McKibben said.

Many of Bradley Arant’s clients have indicated they would like to use one firm across state lines, McKibben said. And, he added, since the nature of the profession requires lawyers to be licensed to practice in each state, a group cannot simply move across state lines. Mergers have been the prevailing way to expand, or at least they have been for Bradley Arant.

Wayne Drinkwater, partner in Bradley Arant’s Jackson office, said Bradley Arant was not the only law firm to inquire about the possibility of a merger.

“We were very fortunate to have some good firms express an interest in us,” he said.

Drinkwater said he and the others in the office felt Bradley Arant was a good fit in terms of personalities, “professional goals and how they practice law.”

The reason for so many firms moving into Mississippi? Drinkwater believes it is because the state is now viewed as one of the premier litigation jurisdictions in the country. There are a number of very large and complicated cases in the state right now.

“I think regional firms in the Southeast view Jackson as a good place to be, but even if these kinds of cases you’ve seen weren’t going on, I think Jackson is an excellent law practice town,” he said.

In the future, Drinkwater expects he’ll see other regional firms entering the state. And he expects they’ll do it the same way Bradley Arant did it: by merging with another firm.

“I can’t just sit here and rattle off names, but I do expect that,” he said.

Baker Donelson Bearman & Caldwell have offices in Atlanta, Washington, D.C., Memphis, Knoxville, Nashville, Chattanooga, and Johnson City, Tenn., Huntsville, Ala., and now Beijing, China. The home office is in Memphis. The firm opened a Jackson office in 1995.

Unlike the reasons many law firms are coming into the state today, which tend to center in many cases around the litigation climate, Baker Donelson’s interest was not in the Jackson market. Theirs was in a group of lawyers who happened to be in Jackson and who “had a really excellent regional health care practice,” said Bill Reed, the firm’s president and CEO.

“Now I think what’s driving it is the litigation climate,” he said.

And while there may be plenty of work now, Reed believes some firms with less than 100 associates and partners that are not categorized as “boutique” (those that have a particular area of legal expertise) could fail because they might not be able to compete with the larger firms.

The pace of litigation in Mississippi will probably not be slowing anytime in the near future though, Reed said.

“For that to happen either the Legislature or the Supreme Court will have to engage in some sort of tort reform that makes it less attractive for plaintiffs’ lawyers to file their suits in Mississippi,” he said. “And I frankly don’t see that happening anytime soon.”

Whatever happens in Mississippi in the future though, Reed believes regional firms will continue to come into the area in the future “because the business world in virtually every sector is consolidating.”

“The clients are getting bigger and more global. And they’re getting bigger geographically with bigger revenues. The trend very clearly is for those companies which are the choice clients and the ones who have large legal budgets, to look for fewer firms rather than more firms. So the firms that are going to be doing the best work are going to be the big ones.”

Baker Donelson has about 260 lawyers now firm-wide; their strategic plan over the next two to three years is to have 500. Already, they have had merger talks with law firms in Birmingham, Ala., Charlotte, N.C., and in New Orleans, according to Reed. And Reed said the firm is going to grow significantly in Atlanta, Nashville and Washington over the next few years as well.

Reed believes he’ll see more mergers and more regional, national and international firms opening up entirely new offices in the future in Mississippi and all over the US. But he said the merger route is the more attractive way to go because it is faster and there is no impact on cash flow since merging is a lateral move.

With offices in Houston, Texas, Baton Rouge and New Orleans, La., Mobile, Ala. and Washington, D.C. and a four-and-a-half-year-old Jackson office, Adams and Reese is another national firm. The Jackson office is made up of a number of lawyers who came from solo firms in the area.

“We decided we wanted a regional practice and that’s why we’re with Adams and Reese,” Jay Stewart, a partner in the firm, said.

Adams and Reese is a full-service firm with 26 lawyers in the Jackson office and close to 200 firm-wide.

“We’re not growing specifically to grow,” Stewart said. “We’re being very intentional about how we grow, and we grow to accommodate the needs of our clients.”

The perception of the legal community is that large businesses and companies like to have law firms with regional capabilities that supply all of their needs.

He added that multi-office law firms are not a new trend, but have been developing over the last 20 years.

“This is a trend we’re seeing in our area later rather than sooner,” he said. “I think it has to do with responding to the perceived needs that our clients have for quality representation in more than one jurisdiction and because certainly the larger business and companies have multi-jurisdictional business practices.”

According to the University of Mississippi (UM) School of Law Annual Employment Report — Class of 2000, 35% of all graduates have ended up in a firm with two to 10 lawyers, followed by 14% who are doing clerkships and 12% who are at a firm 51-250 in size.

Joyce Whittington, director of career services at the UM School of Law, said a lot of graduates like the smaller &#8
220;satellite&#8
221; offices, because the office is small but the benefits are the same as a larger firm might have. And, she added, if the juris doctors do hop from firm to firm, usually it is to move from a larger to a smaller

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