Accessibility Links

The merger that evolved into a takeover

Posted by: Laurence Simons 23/11/14

A law firm has swallowed its prospective partner alive - but is it really a case of the legal sector emulating 'nature red in tooth and claw'?

Mergers that don't quite go to plan are a part of business life, but something particularly cannibalistic has just happened stateside: A move to amalgamate a couple of law firms has ended up with one party suddenly swallowing the other alive.

Originally, the big plan was for Philadelphia-based international firm Morgan Lewis & Bockius to join forces with Boston's Bingham McCutchen. However, matters then took a twist, in what Philadelphia newspaper the Inquirer described as 'legal Darwinism'.

Rather than merging, Morgan Lewis has ended up taking over its rival, with a vote passing a measure that will see 227 out of Bingham's 307 partners being brought on board.

Darwinism? Well, that is one way of looking at it. Another biological analogy might be that of a black widow or praying mantis, where the mating ritual ends with the male being eaten by the female.

It may be a question of the survival of the fittest for the Bingham partners, though; those at the top of the food chain have a new employer, but the other 80 have been left blowing around in the wind like half-chewed, inedible scraps of bug. Having been cut adrift in this way, their futures are uncertain.

Of course, evolutionary analogies only go so far. It might be argued that the legal profession in the US is 'evolving' in response to significant changes in environment, not least a cut in legal spending by corporate America after 2008; effectively a financial version of the rapid environmental change that was caused by the meteorite that apparently wiped out the dinosaurs 65 million years ago.

While some legal dinos may have become extinct, the business of M&A is, of course, a matter of convergence - unlike evolution where a process of divergence takes place.

So, while it may be that Morgan Lewis & Bockius has emerged as a voracious predator that has gobbled up one of its unsuspecting rivals, and as such has shown itself to be the 'fittest', it is perhaps something other than Darwinism that has enabled it to do so.