Morgan Lewis acquires Boston's Bingham McCutchen

Morgan Lewis & Bockius L.L.P., a fixture in the Philadelphia legal world for more than a century and in recent years an emerging player in global markets, announced Friday it would acquire much of Boston's Bingham McCutchen in a deal that would make the combined law firm one of the world's largest.

Under terms of the deal, Morgan will hire about 227 of Bingham's 300-plus partners by the end of the month. Morgan, which has about 1,400 lawyers, also is expected to hire hundreds of associate-level lawyers and support staff. Morgan will have about 2,000 lawyers after the acquisition, ranking it among the top five law firms in the United States.

With Jami Wintz McKeon taking over as chair of Morgan in October, the law firm also ranks as the largest in the U.S. headed by a woman.

"This is a good deal for Morgan," said Ward Bower, an analyst with the Newtown Square legal consulting firm Altman Weil. "Bingham is just chock-full with really good lawyers."

The acquisition announcement capped months of negotiations between the firms. Interest by Bingham seemed to fade in July but quickly revived a short time later, and partners from both firms have been negotiating to work out the details since.

Bingham has been under some financial pressure. It suffered a significant financial setback in 2013 when revenue dipped 12.7 percent, and has since been hit with a string of partner defections in the U.S. and abroad.

In the legal world, the twin dynamic of reduced revenue and departures of prominent, top-earning lawyers can prove deadly, and Bingham reportedly had been considering filing for bankruptcy if the merger talks failed.

For Bingham partners, Morgan Lewis may have been more than simply a safe harbor. A recent finding by the judge overseeing the bankruptcy of Dewey & LeBoeuf, the onetime legal powerhouse that collapsed in 2012, increased the financial exposure for former partners of Dewey, and might also have been applied to Bingham had it filed for bankruptcy.

Under the ruling, former partners of bankrupt firms can be ordered to repay compensation they earned during the time of a firm's insolvency, and the so-called clawback can date to well before the official bankruptcy filing.

The deal seems to offer many advantages for Morgan Lewis, bolstering offices in New York and Washington, where the firm will have 400 lawyers, among other places. Morgan also will acquire a new telecommunications team, a practice area it does not have. Its number of offices will grow from 26 to 28.

Bingham partners have already concluded their vote to approve the deal. Sources close to the talks have described the transaction as an acquisition of much of the Bingham firm by Morgan Lewis. As the talks progressed in recent weeks, Morgan partners offered to take on some Bingham liabilities, such as lease obligations, so long as a critical mass of Bingham partners with substantial books of business joined the firm.

That number had been variously described as between 220 and 275.

Bingham partners had until Nov. 7 to respond to offer letters, and apparently enough accepted. Morgan partners will vote this month on the exact number of Bingham associates who will get offers.

The drive to acquire Bingham will likely be credited to McKeon, who has made her mark at the firm representing major Wall Street banks and investment houses while taking the lead in major expansions in the U.S. and abroad.

In one of the firm's most significant moves, Francis Milone, who preceded McKeon as chair, gave her responsibility in 2002 for recruiting lawyers from the then prominent but failing Brobeck, Phleger & Harrison law firm in California, and then to manage their assimilation into Morgan.

Brobeck was one of the best-known law firms on the West Coast, but it bet heavily on the dot-com boom just before the bubble burst.

The firm dissolved in early 2003, but before the collapse, McKeon had set up shop in its San Francisco offices, urging the Brobeck partners to make the jump. Former Brobeck partners now say it was her advocacy that persuaded them to make the move.

227

Estimated number of Bingham McCutchen partners who will join Morgan Lewis & Bockius.

2,000

Number of lawyers Morgan

will have after the deal.

28

Morgan offices worldwide post-acquisition.

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