Editor: What were the reasons for the merger of Collier Shannon and Kelley Drye?
Kirk: The merger does a number of important things for Kelley Drye. It gives us a significant presence in DC and Virginia, raising our bench strength of professionals there from 50 plus to over 150. We had been in Washington for quite a long time. Merging with Collier Shannon expands that, giving us a real presence in the DC market. We also have a small but successful office in northern Virginia that will be unaffected by the merger.
The merger also gives us a substantial number of new or enhanced practice groups. It has matched Kelley Drye's litigation and transactional strengths with Collier Shannon's strengths in legislation and regulation. We have significantly expanded our antitrust, environmental and IP practice capabilities. We added a government relations capability that did not exist prior to the merger. We added an international trade practice which we did not have. Lastly, Collier Shannon's advertising practice joins nicely with our litigation practice.
Rosenthal: The merger is remarkably complimentary. There was little overlap in our practices. Where there was overlap, the merger has strengthened those practices, for example, in our IP practice. The merger fully established practice areas where Collier Shannon wanted to be stronger - such as corporate and litigation - and in those areas where we had capabilities but not nearly as great as those that Kelley Drye possessed. Together, we are both better and stronger.
Editor: Why would in-house counsel prefer the combined firm rather than the individual firms before the merger?
Kirk: Corporate counsel have always appreciated the responsiveness of Kelley Drye's and Collier Shannon's relationship partners, and have already experienced the greater range and enhanced strengths of the expertise backing them up.
Rosenthal: Let me give you an example. In the last few weeks, a client of mine at Collier Shannon came to us with a securities offering matter. Their traditional corporate securities firm could not help them with a related international trade issue. Their usual outside customs lawyers could not deal with the securities aspects of that deal. Prior to the merger neither Kelley Drye nor Collier Shannon could have handled those aspects independently. Post-merger, we were able to handle both aspects smoothly and efficiently in a timely manner. The client was delighted.
Kirk: I, too, believe our clients prefer the combined firm. For example, we represent several private equity funds and handle acquisitions and dispositions, as well as other work for them. We were recently involved in a disposition where the antitrust aspects needed consideration. Collier Shannon has significant regulatory expertise in the antitrust area. Our private equity client, at our recommendation, used Collier Shannon attorneys to handle that aspect of the corporate transaction. Otherwise, the client might have found it necessary to bring in another firm to handle the antitrust side.
Another example is that we have a premier telecom practice in Kelley Drye's Washington office. Working with Collier Shannon attorneys, that office was able to provide government relations services that Kelley Drye would not have been able to offer. The client would have had to go to another firm to handle that work.
Editor: How well do the cultures of the two firms mesh?
Kirk: Kelley Drye has historically been an open firm. The partners are all business owners and the finances of the firm are transparent to all partners. Our executive committee is elected by the partnership. It generally acts by consensus - and it is rare when there are differences that require a vote. One of the appealing things for us when we first started conversations with Collier Shannon was how similar it was in terms of its governance and operation. This contributed greatly in completing the merger and we were able to move forward quickly. Even though we were firms of different sizes, we were able to mesh easily.
Rosenthal: The approach to compensation of the two firms was very similar in that both encourage cooperation among the partners. That has been an essential element in bringing about the merger and making it work.
Editor: Both firms have placed an emphasis on partnering with their corporate clients; will this tradition be continued in the merged firm?
Kirk: Definitely. We have always reached out to our corporate clients to help them when they have a particular need that they would like us to fill. That includes sending people to work temporarily as part of a client's staff, and it is something we do quite often.
Rosenthal: Both firms have approached this merger by considering how it would benefit our clients. That has been foremost in our thinking. Everything we have done as we implemented the process of integration has included a consideration of that issue.
Editor: Many legal departments prefer to use firms that reflect their values, such as dedication to diversity and pro bono.
Kirk: We also are dedicated to those values. We are parties to the diversity initiatives of the Association of the Bar of the City of New York, and have worked jointly with some of our larger corporate clients to promote diversity. We are also actively involved in pro bono and support the Association's initiatives in that area, as well.
Rosenthal: Collier was equally committed in both areas. Our clients expect that.
Editor: What will happen in DC as a result of the merger?
Kirk: Kelley Drye's previously existing DC office has moved into the space which houses Collier Shannon. The two firms in Washington now occupy the same office, which permits them to work closely together from the outset.
Editor: How will the new capabilities resulting from the merger be made available to the firm's other offices elsewhere in the country?
Kirk: As a firm, Kelley Drye's various offices work together on a daily basis. Our services are well integrated from office to office. It is not unusual for any transaction or litigation handled by the firm to involve people from a variety of the offices. Therefore, we have no present plans to move staff from one office to another to grow a new practice area there. Because the merger adds capabilities that we did not have before, however we are attractive to a wider range of potential lateral hires.
Rosenthal: With the wonders of telecommunications and ease of travel, it would not make sense for us to duplicate practices around the country. Since the merger, we have had 30 matters on which Collier Shannon lawyers that moved over to Kelley Drye have worked jointly with Kelley Drye lawyers. Virtually 90 percent of those have been handled across offices and it worked well, even without having people physically present in the same office.
Editor: Are any changes contemplated in the organizational structure of the merged firm?
Kirk: There was a short list of things we had to do to achieve full integration. For example, as a result of the merger, we have added new members to our management committee. However, there have been no structural changes that affect the way either firm has operated in the past.
Editor: Has the vision of the future changed?
Kirk: We decided about two and half years ago that there was a need to grow judiciously. The merger was a milestone in carrying out the program we charted then. Our plan is to continue to look for opportunities such as this merger and lateral hires. We do not have a plan to become dramatically larger or to expand significantly on a geographic basis.
Editor: Do you have any closing remarks?
Kirk: We offer the greater convenience of one stop shopping and the confidence that the merged firm has added capacity to view a problem in all its dimensions. Considering that the merger is only six weeks old, it is remarkable how seamlessly we have been able to combine our expertise so that now we work together in an integrated way.
Rosenthal: There have been some issues, but the integration process has been phenomenally smooth. Although the firms differed in size and history, the process has gone well, largely because our cultures are so similar. People like one another and want to make things work. When issues come up, we are able to agree on how to resolve the problem because there is such good will and mutual respect.
Jim and I have talked a lot about what we are doing and where we are going. It is amazing how we see things so similarly and agree so much. The thing we focused on from the beginning was not just what the merger meant for Collier Shannon or Kelley Drye, but what it brings to our corporate clients. I am delighted that we can offer better service to our clients. That means more depth of expertise, more resources when appropriate and highly competitive rates. We will find savings by managing an even more efficient and cost effective operation - and will pass along those savings to our clients.
Published July 1, 2006.
