Merger talks that began last year between Ice Miller LLP and a Louisville-based law firm continue to progress toward a deal, sources familiar with the negotiations said.
IBJ reported in December that the city's third-largest law firm was poised to tie the knot with Greenebaum Doll & McDonald PLLC. But operational differences—namely in the way the firms compensate partners—are taking longer than expected to sort out and have helped stall an announcement, according to sources with knowledge of the deal who wish to remain anonymous.
When the deal might be consummated remains unclear, although it could be at the end of the year. Mergers between law firms typically take effect Jan. 1, after the books are closed on the previous year's financials.
Ice Miller is the larger firm, with 258 attorneys, compared with Greenebaum Doll's 180. Both practices are venerable stalwarts in their respective cities—Ice Miller was founded in 1910 and Greenebaum Doll in 1952. But their names carry little cachet in the other's hometown, raising the possibility a new moniker would be a combination of the two.
If Ice Miller is going to pull the trigger, a decision could come soon, said Tom Clay, a principal at legal consulting firm Altman Weil in suburban Philadelphia.
He said talks between the two likely started three to four months before they were reported late last year, which means discussions are nearing the one-year mark—a long time for a merger to be completed.
"Taking [a merger] from soup to nuts within six months would not be unusual at all," he said. "We're potentially running nine to 10 months, so that is very unusual."
Clay acknowledged, though, that partner compensation is one of the more critical issues facing firms when considering a merger and could take longer to resolve.
Ice Miller employs what is considered a traditional system in which profits are divvied up and partners are compensated based on production and seniority. In contrast, Greenebaum Doll favors the more common "eat-what-you-kill" model that pays partners directly for the business they bring.
Sources said Ice Miller may want to become larger to help offset its traditionally lucrative bond work that is struggling amid the challenging economy. Legislation passed by the General Assembly last year that puts big-ticket school construction projects to a referendum hasn't helped either.
The two firms have an existing connection. Mitchell Hopwood, who joined Ice Miller as chief operating officer in February 2008, arrived from Greenebaum Doll.
Both firms remain mum on a marriage. In December, Ice Miller issued a statement neither confirming nor denying a potential partnership and has repeatedly declined to further discuss the negotiations.
"We stand by our statement in December and have no further information to add outside of that statement," firm spokeswoman Joy Fischer said in an e-mail this month.
In addition to Louisville, Greenebaum Doll has Kentucky offices in Covington, Frankfort and Lexington, as well as in Cincinnati and in Nashville, Tenn. Ice Miller has 227 lawyers in Indianapolis and 31 others in Chicago, the Chicago suburb of Lisle and Washington, D.C.
Ice Miller within the past year lost nine lawyers, allowing Baker & Daniels LLP and Barnes & Thornburg LLP to surpass it on IBJ's annual list of largest area law firms. With a merger, the firm may be seeking a larger regional presence to remain competitive, Clay said.
"A lot of what you're seeing in the Midwest is an ability to become a regional or super-regional firm," he said. "Some of those firms will not necessarily go to Chicago."
Nationally, the number of mergers and acquisitions across the country continues to climb, as law firms look to add more talent and offices to stay competitive.
In the first quarter of this year, 33 mergers were completed, compared with 22 during the same time in 2008, according to New Jersey-based legal consultancy Hildebrandt.
If Ice Miller merges, the local legal landscape will look much differently than it did last year. Locke Reynolds LLP announced in January its acquisition by Frost Brown Todd LLC in Cincinnati. And in May 2008, Sommer Barnard PC became part of Cincinnati-based Taft Stettinius & Hollister LLP.