A Trans-Atlantic Merger Without Layoffs? Sonnenschein Chair Says None Are Planned
The chairman of Sonnenschein Nath & Rosenthal says there are no plans for layoffs or office closings as the result of the merger of his law firm with London-based Denton Wilde Sapte.
The new law firm, if approved by the partnerships in a June 9 vote, will be called SNR Denton and will be one of the world’s top 25 law firms in terms of headcount. The merger would take place Sept. 30.
Sonnenschein chairman Elliott Portnoy explained the motivation in an interview with the ABA Journal.
“This isn’t about cost reduction or achieving efficiencies, this is about meeting our clients’ needs,” said Portnoy, who would share management of the merged firm with Denton CEO Howard Morris. There are “no planned office closings, no layoffs.”
“We’ve already identified dozens and dozens of specific opportunities where we believe together we can meet the needs of our clients in a more efficient, high-quality way than either of us could do alone,” Portnoy said.
Sonnenschein has had an eye on expansion ever since a 2006 strategic review declared an ambition to become a truly global law firm. But with only two offices outside the United States, it still hadn’t achieved that goal. Sonnenschein “made the first overture” in the merger tête-à-tête, but the firm was already on Denton’s radar because of its markets, Portnoy said.
Denton has offices in Europe, the Middle East, Africa and Asia, but none in the United States. Both firms had missed out on opportunities because of a lack of overseas offices. “Both firms have clients that would like and have historically preferred to have a single firm meet their needs in all of the places where they do business,” Portnoy said. Sometimes the clients went elsewhere.
Today’s merger announcement follows the May 1 trans-Atlantic merger of Washington, D.C.-based Hogan & Hartson and London-based Lovells. Since the Hogan Lovells announcement, Hogan & Hartson has seen a number of lawyers depart, including seven in Geneva, 18 in Berlin, and 38 in Warsaw. Meanwhile, Lovells announced it will close its approximately 20-lawyer Chicago office.
Looking ahead, Portnoy said “the challenge and the opportunity is integration” of the two firms. Denton will transition from a lockstep to a merit-based compensation system, but the firms have shared values on a number of issues, he said. They include commitments to client service, diversity, pro bono, community and corporate responsibility, and inclusion.
The boards of both firms unanimously recommended the merger, and their plans will be presented to the partners over the next two weeks. “The reaction thus far has been exceptionally positive,” Portnoy said.
