While law firm merger and acquisition activity on the East coast continues at strong pace, it’s grinding to a halt in the Western U.S.
Chalk it up to a difference in culture.
Local attorneys say law is practiced in a decidedly different manner in the West than in other parts of the country.
Lawyers are less likely to spend resources on getting bigger faster to conquer a portion of the market, and more likely to quietly splinter than to merge.
The desire to merge among Western law firms barely exists, and in smaller markets like Colorado Springs, that urge is all but nonexistent.
“There was a little of that sort of activity in Colorado Springs at the end of the 1980s through the early 1990s,” said Stephen Mulliken, partner, Mulliken, Weiner, Karsh Berg and Jolivett. “It was driven, as I recall, by a bad economy and some firms thinking a merger might strengthen them. But there’s been nothing really since then.”
Mulliken said merger and acquisition activity requires “a lot of time and resources” of a law firm, which takes away from a focus on client services. “Truthfully, we just don’t behave that way in this legal community.”
A merger and acquisition study by Altman Weil, a national consulting firm that has a legal consulting arm, reported that there were considerably fewer mergers and acquisitions among Western firms than those from other regions of the U.S. from 2007 through the first quarter of 2011.
Most of those interviewed said the culture of Western firms simply works against an active merger/takeover market.
One distinctive feature of the Western law community is its independent streak.
The image of the Western lawyer as exemplified by the legendary plaintiff’s attorney Jerry Spence isn’t far from the mark, said John Randolph Torbet, partner, Torbet and Tufts, Colorado Springs.
“This independent streak leads to smaller firms in general. Merging isn’t so attractive,” Torbet said. “It’s more of a Western mentality.”
Torbet is typical. He was part of a four-member firm in 1975 when he decided to strike out on his own in the Springs. He only took on a partner in 2008 to ensure that his clients would have continuity after he retired.
Torbet believes Western lawyers show a greater respect for their courtroom opponents.
“There’s a balancing act you have to perform,” he said. “You know you’ll see the other lawyer in court again, so you don’t want to burn your bridges. But you must represent your client aggressively.”
Several local attorneys said they believed Eastern, southern and Midwest law firms are more likely to engage in predatory activities, such as going after another firm’s clients, its top partners, or a key practice area — actions that would be considered improper in the Western legal community.
The lawyers in those non-Western firms are viewed as combative, confrontational and overly aggressive by members of the local bar.
“I had a client from the East coast who came out here not too long ago with a very different expectation about the kind of representation he would receive here. It was to the point of being unprofessional,” says Rich Wood of the Colorado Springs firm Wood and Ramirez. “I had to tell him, ‘That’s not how we do it here.’”
Wood cut his legal teeth working for a major Wall Street law firm. He’s seen the difference in attitude and behavior between lawyers in the East and those in Colorado. “People try to get along here,” he said. “We try to get cases resolved without duking it out. They like to duke it out back East.”
There are clear differences between the culture of Western law and that of other regions, insisted a Portland, OR, lawyer who requested anonymity. “It’s more congenial out here, people don’t bad-mouth each other, and clients rarely switch law firms,” said the lawyer. “A couple of large national firms have tried to break into this market but without much success.”
At the local level, the rejection of the “urge to merge” is even more pronounced.
Clients have come to trust the local lawyers and are less likely to bolt for a larger firm as they might in other markets, said Dawn Kubik , an associate with Jones Waters Geislinger in Colorado Springs. That’s another strike against mergers with larger firms.
“The local Colorado Springs firms, like us, are highly invested in the local community. Our services tend to be more specifically tailored to the nuances of Colorado Springs rather than a more universal or outside approach. Just looking at our firm alone there are five attorneys with over 125 years of combined experience in the community. It seems firms, such as us, tend to be more involved in the community.”
In fact, the Wood and Ramirez firm was born when Wood and his current law partner, Matt Ramirez, left the large local firm, Sparks Wilson Borges Brandt and Johnson, in 2008 amidst rumors it would be acquired by a larger Denver law firm.
“We just weren’t interested in being part of some huge firm, so we left and started our own,” Ramirez said. “And we’ve done just fine.”