This month's merger of the law firm Sommer Barnard PC into Cincinnatibased Taft Stettinius & Hollister LLP likely will cause salaries for starting lawyers to escalate citywide.
That's because, starting June 1, Taft plans to pay its first-year associates here $107,500-more than the $100,000 firstyear associates currently make at the highest-paying Indianapolis firms.
If history is any indication, the topthree Indianapolis firms of Ice Miller LLP, Baker & Daniels LLP and Barnes & Thornburg LLP, and likely a few others, soon will follow suit.
In most instances, big law firms move in lockstep on associate pay. When one bumps, they all do, because they're mostly courting the same candidates-those who finish at or near the top of their classes.
"No firm will ever get its pick of every law student it wants," said Robert Hicks, partner-in-charge of the local Taft office and former director of Sommer Barnard. "Therefore, firms targeting the law students who are most in demand try and gain every recruiting advantage they can. Compensation, benefits and bonus plans are obviously very critical components of that."
Leaders of the former Sommer Barnard say combining with Taft Stettinius gives the Indianapolis firm the heft to compete with the largest rivals in Indianapolis.
Sommer Barnard was founded in 1968 and grew to 103 attorneys, making it the city's seventh-largest firm. It represents clients such as medical-device maker Cook Group Inc. of Bloomington, broadcaster Emmis Communications Corp. and private-equity firm Hammond Kennedy Whitney & Co.
Taft formed in 1885 and rose to national prominence in 1947 when its labor department helped Sen. Robert A. Taft draft the Taft-Hartley Act, which curbed the power of organized labor.
The deal brings Taft's roster of attorneys to about 320 in nine offices in Ohio, Kentucky and Indiana, vaulting it to the nation's 125th-largest firm, up from 200th. Taft has offices in China and Japan as well. This is the firm's first foray into Indiana and most likely not its last, Taft Managing Partner Thomas Terp said.
"We feel, with Taft, it gives us a leg up that we wouldn't have before, to compete with the big three," Hicks said. "There are just parties we don't get invited to, to pitch clients."
The merged firm is larger than any of Indianapolis' big three firms, all of which have 225 to 250 attorneys. But it won't be only Taft's legal firepower creating headaches for Indianapolis biggest firms.
One of the ramifications of paying lawyers more is higher costs for clients, said Alan Levin, managing partner of Barnes & Thornburg, which is contemplating following Taft's lead.
"It's always our goal to get the top talent that we can into the firm, so we want to make sure we're competitive," he said. "But we also have to look at the financial model to make sure it makes sense financially, because the clients incur the costs."
Krieg DeVault LLP, a firm with nearly as many attorneys as the local Taft office, pays starting associates $95,000. While salary is essential to a law student's decision, additional compensation factors such as retirement contributions, health care plans and parking expenses should be considered, Krieg Managing Partner Mike Williams said.
"You can't always look at starting salaries," he said, "but I think you try to stay competitive."
Merger talks between Taft and Sommer began nearly two years ago and sprang from Taft's strategy to expand its Midwestern footprint. Terp had litigated cases with Sommer founder Bill Barnard and partner Frank DeVeau and thought the two firms shared much in common.
The drawn-out talks between Taft and Sommer had spawned widespread speculation within the local legal community that Sommer had fallen on hard times.
Yet Hicks insists the firm is stable, citing a 50-percent increase in revenue during the past five years and two cases in particular that netted $12.5 million in contingency fees.
"We think people must have assumed that the only reason we would merge with Taft is because we had to," Hicks said. "Quite the contrary is true. The only time a firm our size could ever pull off a merger with Taft is when things are going really well."
Many of the merger's details were hashed out in a back room of The Sherman House Restaurant & Inn, a popular dining destination in Batesville between Cincinnati and Indianapolis.
Taft's code name was the Bengals and Sommer Barnard's the Colts.