Almost exactly one year after Womble Carlyle Sandridge & Rice and U.K.-based Bond Dickinson announced they would be forming a strategic alliance, the two firms have decided to take things to the next level.
The partners of Womble Carlyle and Bond Dickinson voted May 30 to combine their operations in a new entity that will use the name Womble Bond Dickinson.
Once the combination takes effect in October, Womble Bond Dickinson will have more than 420 partners and 1,000 lawyers working in eight offices in the United Kingdom and 15 offices in the United States. The combined firm will rank among the 20 largest U.K. firms and among the top 80 in the United States.
Womble Carlyle is already the largest law firm in North Carolina and is the seventh largest firm in South Carolina.
Womble Bond Dickinson is expected to have annual revenues of $410 million.
Womble Carlyle chair and chief executive officer Elizabeth “Betty” Temple said the two firms decided to pursue a formal combination after witnessing the success of the strategic alliance. Over the past year, the two firms have been referring clients to each other when they needed representation abroad.
Neither firm had a presence outside its home country before the alliance.
“We really decided to pursue this combination after seeing just how well we worked together,” Temple said. “Our clients have benefitted from the depth and breadth of our collaboration. And we have seen just how compatible our values and culture are. It became an obvious thing to do.”
Law firm consultant Kenneth Young of Young Mayden in Charlotte said he thinks Womble Carlyle and Bond Dickinson were smart to establish an alliance before combining.
“They could serve as role models for other firms considering a merger,” Young said. “By living
together for a year before getting married, the two firms were really able to establish trust between one another.”
Partners at both firms will be equal members of Womble Bond Dickinson, and each legacy firm will appoint four partners to the board of the combined firm. Temple, who stepped into her leadership position last year, will serve as co-chair of the board alongside Bond Dickinson managing partner Jonathan Blair.
But the two firms are stopping short of a full financial combination. Instead, the new firm will operate as a company limited by guarantee, which is essentially the U.K. version of a Swiss verein.
The two legacy firms will continue to operate as separate partnerships, each with its own independent management.
Going with this structure will allow Womble Bond Dickinson to avoid some of the headaches that would inevitably follow from a full financial integration, including figuring out how to pay taxes under two different tax systems.
The company limited by guarantee structure has become increasingly common among recent transatlantic firm combinations, including the one between the U.K.’s Eversheds and Atlanta-based Sutherland Asbill & Brennan, which took effect in February.
Temple said Womble Carlyle and Bond Dickinson have already instituted a mechanism for dealing with another common stumbling block for law firm combinations: client conflicts.
Temple said the two firms have addressed many of the client conflict issues during the course of their alliance. However, she acknowledged that there may be additional conflicts to work out as the date of the combination gets closer.
“That was one of the benefits of the strategic alliance. We really got to know each other as firms and work out a lot of the kinks,” Temple said. “Actually, we found fewer conflicts while working with a transatlantic firm than we often found when we looked at domestic combinations.”
Tale of the tape
As North Carolina Lawyers Weekly reported last year, Womble Carlyle and Bond Dickinson appear to match up well.
Both Womble Carlyle and Bond DIckinson have experience with combinations, so they’re likely aware of some of the common pitfalls combinations can bring. The history of law firm mergers is rife with stories about culture clashes, compensation disputes, IT disasters and client conflicts.
“That’s one of the benefits of a company limited by guarantee structure,” Temple said. “We will operate as a transatlantic firm strategically, but our back offices and finances will operate as before.”
Temple said the decision to move from an alliance to a combined firm was driven by client demand.
“We’ve been better able to serve clients internationally through the alliance, but they still see us as two separate firms,” Temple said. “This will allow us to really build on the success of the alliance and better serve clients because they will now be coming to a single firm.”
Bond Dickinson was formed in 2013 out of the merger of Bristol, England-based Bond Pearce and Newcastle-based Dickinson Dees.
Meanwhile, Womble Carlyle acquired Buist Moore Smythe & McGee in Charleston in 2011 and Hall & Bowers in Columbia, South Carolina in 2012. But this will be Womble Carlyle first encounter with a combination of equals.
Womble Carlyle brings a strong presence in the southeastern and mid-Atlantic United States to the marriage. The firm has deep ties to North Carolina, with five of its 15 offices in the Old North State.
Womble Carlyle serves as a full service firm, with a deep bench of corporate, financial services, energy, real estate and regulatory lawyers. In recent years, the firm has been making moves to deepen its financial technology capabilities, which Temple said the firm sees as a growing opportunity.
Womble Carlyle’s clients include BNC Bancorp, Bank of America, R.J. Reynolds Tobacco Co., Syngenta Crop Protection Inc. and Wells Fargo. Womble Carlyle’s FinTech clients include NCR, Heartland, Zenmonics, and Clear Markets, according to the firm’s website.
For its part, Bond Dickinson is known for its energy and natural resources practices. The two firms cited those practices as a key area of overlap, when announcing the alliance last year.
Bond Dickinson also brings to the table an experienced financial services practice, which includes attorneys who represent FinTech companies.
Both firms have typically targeted middle-market clients, but each firm’s book of business includes large, multinational corporations.
Bond Dickinson reportedly represents AIG, British Gas, CitiBank and Lotte Chemicals, among many others.
Additionally, the two firms charge comparable rates and have filled a similar niche in the market. The hope is that by joining forces the two firms can better compete against the proliferation of mega firms that have cropped up as the legal industry continues to consolidate.
Already in 2017, there have been 41 law firm combinations, according to law firm consulting firm Altman Weil’s MergerLine report. Last year saw 85 combinations, stopping just short of the 2015 record of 91.
The combination between Bond Dickinson and Womble Carlyle will put the firm among the other international players in North Carolina. Alston & Bird, Katten Munchin Resenman, Kilpatrick Townsend & Stockton, K&L Gates and McGuireWoods all have offices outside the United States or alliances with firms that do.
Two years ago, McGuireWoods entered into its own alliance with Shanghai’s FuJae Partner, giving it access to clients in the world’s second-largest economy. It also added to McGuireWoods’ existing international offices in Brussels and London, the latter of which was acquired through the firm’s 2009 merger with U.K.-based Grundberg Mocatta Rakison.
The only truly global firm in North Carolina is K&L Gates, which has offices in 45 locations, including three in Australia, seven in China, seven in Europe, two in the Middle East and one in South America.
Temple said the formation of the transatlantic Womble Bond Dickinson will give the firm a leg up as more and more international firms move to the United States, and North Carolina in particular.
“The world has gotten so small that even small startups in North Carolina want to sell their products all over the world. Many companies want to deal with a single firm for their legal needs,” Temple said. “It’s a great thing for the Carolinas to have a firm that remains committed to the local market, which also has reach that goes far beyond that.”
And don’t worry, dog fans. Winston, the bulldog mascot that Womble Carlyle has used for years, will remain. Firm spokesman Bruce Buchanan said, “Maybe he can get an English bulldog as a cousin.”