Kent Zimmermann of the Zeughauser Group Discusses Mergers & Law Firms
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I interviewed Kent Zimmerman of Zeughauser Group on the 2016 law firm merger environment, the merger of Andrews Kurth with Kenyon & Kenyon, the Hogan Lovells merger, the Polsinelli & Novack Druce merger, Dentons challenge to global law firms and the race to 10,000 Attorneys, managing partner qualities, the 2016 Elections, Brexit, unfunded pension liabilities, Kent’s love of Twitter, what’s left on Kent’s bucket list, etc.
Links referred to in this episode
Kai Ryssdal of Marketplace.org
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Chris: Welcome to the Law Firm Leadership podcast, I’m your host Chris Batz with The Lion Group.
Today I have the pleasure of speaking with Kent Zimmermann of Zeughauser Group. Kent counsels the leaders of Am Law 100, 200, the Global 100 and specialty law firms. He focuses on strategic growth planning, mergers and other combinations and client service interviews.
Some of his clients have said, “You have been a great help to us in reflecting on our strengths and challenges. Your presentation today was another example of the value of our relationship,” said the Chair of an Executive Committee member of an Am Law 10 firm.
He’s also been said, “To say you were well received and highly regarded would be an understatement,” said an EC member of a nationally preeminent specialty firm.
Kent, you get a lot of press, I want to just say a quick list of those sources I noticed, The National Law Journal, Fox News, Fox Business, The Wall Street Journal, Bloomberg Businessweek, Bloomberg BNA, CNBC, The American Lawyer, Reuters and now you get to add to the list, The Law Firm Leadership podcast.
Kent welcome, delighted to have you as our guest.
Kent: Thanks, I’m very happy to be talking with you, I’m blushing a little bit now Chris, but thanks for having me.
The 2016 Law Firm Merger Environment
Chris: Good, well that’s my goal. Well Kent, I have to say that I’m a follower of yours on Twitter and I tend to see the adventures you’re on and tend to sniff out that there’s a deal underplay and I’m just curious, curious and want to get your feedback about the law firm merger environment 2016.
Kent: It’s a hot environment, we’ve been at this, my partners and I have been at this for a long time. We’ve never seen a more active environment with more firms interested in talking to other firms about combining than we’ve seen now. There’s a lot of drivers that cause that activity, but it feels a little bit like everybody’s talking to everybody candidly, there’s a lot of activity and a lot of interest in exploring options.
Chris: There are several thousand law firms out there, not just the top 200, 100 or 350, I mean, are you guys being approached by the entire NLJ 350, what’s the segment of that, who are you guys talking with?
Kent: We’re approached by a variety of firms from small boutiques to the world’s largest firms, firms here in the US, you know, we’ve worked with Wall Street firms, we work with highly profitable firms in other parts of the country; Texas and the West Coast, Chicago, but also other firms that are leaders in their space, including some in Europe and Asia also, so it runs the gamut.
Part of what we do and you mentioned this at the top is we help firms get clarity and then build consensus around what their partners’ aspirations are for their firm’s future. Then after getting clarity and building consensus around that, which sometimes takes some lifting, then we help firms develop a plan to achieve their aspirations. Sometimes that involves helping them get larger and in that context sometimes the possibility of combining is something that firms want to talk about. Sometimes firms want to get smaller to get financially stronger and sometimes they want to double down on areas of substantive practice strength or they want to double down in serving industry sectors that they have preeminence in.
I think kind of the bottom line is, firms come to us typically to help them understand, build consensus around it, achieve their aspirations and sometimes that involves looking at what the opportunities are to combine with firms, sometimes it doesn’t, but often the work that we do is in that context, helping firms strategically get to where they want to go.
I would say in an increasing number of cases, firms in the current competitive environment feel as if it’s very difficult to achieve their aspirations. There’s a huge fight for talent out in the market, there’s a fight for clients, there’s extensive rate pressure that’s significant and has really been almost constant since 2008. So in the current environment, an increasing number of firms we would observe, feel like it’s very hard to get to where they want to go and as a result more and more are interested in putting all options on the table on how to achieve their aspirations.
When firms think about growing they often think about doing that with laterals, they often think about doing that with groups. Some historically have thought about whether combinations could help them get to where they want to go, but what I would say in today’s environment, is that firms increasingly want to consider all of those options and put all of those options on the table.
So I and my partners get a lot of calls from Chairs of firms who say, “We’re not certain that we’re committed to doing a combination, but we’d like to talk about whether you think that might make sense for us, we want to get a sense of where our partners are on that and we want to understand what the opportunities are so that we are fully informed and thinking about our options to be the kind of firm we want to be.”
Chris: Yeah, so it sounds like you’re painting kind of an ideal situation but I can imagine that’s never always that ideal, I mean, are you guys getting pulled in in last minute hostile negotiations?
Kent: Sometimes. There are times where we will be engaged before a firm knows whether or not it wants to combine and there are other times where a firm knows exactly that it wants to combine and with which firm. Sometimes the discussions have already started and we’re asked to help get them through the finish line. In that context, in cases where we’re brought in late in the process, sometimes what we’re asked to do is to help build consensus around getting a deal done or not getting a deal done or help to understand where the consensus is in the firm.
So I think, where we really have earned our fee on a number of deals is by helping a firm get its partners on the same page about what they want to achieve and how to achieve it and sometimes that involves getting a deal done or not.
Andrews Kurth & Kenyon & Kenyon Merger
Chris: I can imagine how critical that is with lots of partners at the table. Let me ask you a question, I don’t know if you can talk about what’s on your table now, but this year you mentioned a couple of firms, particularly I think Andrews Kurth was a big one this year, would you mind talking a little bit about how that went down?
Chris: It sounds like a critical play for Andrews Kurth.
Kent: We’ve helped our clients complete a number of deals this year. A recent one that was widely followed and high profile in the media, it was Andrews Kurth combination with Kenyon & Kenyon. I advised the Chair of the firm, Bob Jewell, as well as his Policy Committee, his Leadership Team, on evaluating that combination and helping them work to get across the finish line.
The firm put a lot into that over a long period of time, 9 to 12 months they worked on that with the folks at Kenyon. It’s a very smart deal in a sense that it’s strategic for both firms and here’s what I mean by that.
Andrews Kurth has great strength in a number of areas. They are widely known for their strength in the energy sector but they also have significant strength in the tech sector as well as the finance sector and with respect to the tech sector, the Kenyon deal was interesting because of the client base that Kenyon brings to the table, the quality of talent which is very high that Kenyon brought to the table and the high-stakes IP litigation for which Kenyon is so well-known, both in New York as well as in other tech centers, Northern California, down in Texas and elsewhere.
So that was an interesting strategic play that helped both firms accelerate the achievement of their aspirations to build preeminence in high-stakes IP litigation, particularly for Andrews Kurth in the tech sector and other sectors.
The Media and Law Firm Savvy
Chris: With deals like that they get a tremendous amount of press, whether positive or negative, does that make your job harder, does it accelerate things to move it along?
Kent: You know, it’s a good question. It does feel as if there’s an increasing number of journalists who cover the business of law and many do a terrific job on that front. There’s always a lot of interest to get the next scoop and to find out what the next merger is going to be.
I find most of the firms I work with, you know, go at a pace that they think makes sense for the firm. Often the pace is independent of how much interest there is from journalists, but I think the interest in the media can be a good thing for firms and is a good thing in many cases, it gives them, the firms, a way to communicate their aspirations, how they’re achieving them, why deals add value, both to the clients as well as to the talent that the firms want to keep and attract.
I think some firms are particularly savvy at working with the media to help them achieve their goals.
Chris: It’s good to hear the media aren’t necessarily demonized completely through that process.
Kent: Yeah well, you know, listen, there certainly are some firms that are more media savvy and some firms that are less media savvy and not every journalist out there is revered by every firm.
Kent: But I do think that some firms do a really nice job in interacting with the media in a way that’s in their best interest, their clients’ best interest, the people’s best interest and I think that there’s a lot of fine journalists that cover this space that really are committed to being objective and telling the facts and the journalists aren’t monolithic and the firms aren’t monolithic but I think personally it’s been a good thing for the industry that there’s an increasing amount of media interest in the business of law.
Hogan Lovells Merger
Chris: That’s excellent, you had mentioned that you guys were a part of Hogan Lovells and then also a Polsinelli merger, can you talk briefly about those two, maybe some learning experiences from those?
Kent: Sure, we did advise Hogan Lovells in the combination, I should say advised Lovells in their combination with Hogan. My partner, Peter Zeughauser led our work on that deal and that was an interesting engagement. We, for a long time before that transaction, knew and worked closely with the former Chair of Hogan, Warren Gorrell, and his team have great respect for him and the firm and interestingly in the transaction between Hogan and Lovells, partly at Warren’s suggested we ended up representing Lovells in that engagement.
I think that that combination is widely viewed as one of the more successful large-scale transatlantic combinations in recent memory. It’s added great value to many of their client relationships.
You know, in that transaction Hogan brought to the table one of the finest and highest quality practices in Washington DC and beyond and of course Lovells brought an extremely high quality practice in the UK that also had made great strides to grow in Asia, that was a quality on quality play and hard to go wrong with that approach. That’s one that’s worked out very well for the firms. I think that’s a widely held perception in the industry that that’s the case.
Chris: Was that a smooth process? I mean you’re dealing with an across the pond situation, I imagine there was some complexity with that.
Kent: You know, there was complexity but it was a smooth process in the sense that there was a meeting of the minds among the senior most people in the firms about what each firm’s aspiration was and what their strengths were.
I would tell you, not just in that combination but more generally, there’s two common threads that we often see in successful combinations and those threads are shared strengths and shared aspirations and both firms did have significant shared strengths and they had shared aspirations, and so because of those common threads being present, because of the meeting of the minds between Warren and David Harris on the Lovells’ side, the leader there at the time, I think it was a surprisingly smooth process compared to some that I’ve seen. There also, you know, was overlap in a commitment to quality and a commitment to preeminence in the markets that they choose to compete in.
That was one of the, not as simple, no combination in my experience is particularly simple to get done, it wasn’t simple, but it was smoother than some that I’ve seen.
Chris: And it seemed like they really preserved the premium brand of what they brought together, that was impressive.
Kent: They did, they absolutely did and they also invested very heavily in the integration process, post-transaction and that, I think, made a big difference in the success that the combined firm sees today.
Polsinelli & Novack Druce Merger
Chris: So moving onto Polsinelli, now this firm’s been growing at an exponential clip, really been making waves in different cities, even knowing that they’re in my backyard here in Kansas City, I’m curious how they pulled off and how that went with the firm that you mentioned, Novak.
Kent: So, I have a huge amount of respect for Russ Welsh, the Chair of Polsinelli as well as his Leadership Team, Practice Group Leaders, Office Manager and partner, so I know they’re… I first started working with Russ and his team six or seven years ago, maybe even eight years ago. First interaction was I was invited to speak at their Partner Retreat, that was shortly after their combination as a firm, so Polsinelli and Shughart combined and I’ve worked with them ever since, including helping them to develop their strategy, embodied their strategic plans. So developed a vision, helped the partners develop a vision and helped the partners develop goals to achieve the vision and then since then have also helped them grow in a number of ways.
So the most recent combination that you mentioned was the combination between Polsinelli and Novak Druce. Polsinelli widely known in the market for strength in the healthcare sector. If you read the industry publications in the health sector, whenever there are rankings or qualitative work at law firms that advise the sector, Polsinelli is widely recognized as one of the strongest firms that serves that sector and they grew out of Kansas City and they’ve built a national practice that’s quite successful as they’ve positioned a preeminence in the healthcare sector.
More recently though they’ve chosen some other practices and sectors to grow and build preeminence in on a national basis and IP is one of them.
So their IP group at the firm is led by a partner named Pat Woolley at Kansas City, he’s an extremely thoughtful and accomplished IP lawyer and in growing their preeminence in IP they were interested in building their strength on a national basis, including in some key markets, Texas, Northern California among them.
So in this combination they were able to accelerate their aspirations in that regard, they were able to combine with a preeminent IP firm, with roots in Houston but also a platform beyond Houston, very high quality talent base, including the former Commissioner of the USPTO, Todd Dickinson, among others.
I can tell you, having been involved, the Novak Druce firm was highly sought after, had a number of suitors and Polsinelli was able to win out in the pursuit of Novak Druce and I think a large part of why they won out is because they have shared strengths, shared aspirations and a similar culture that fit well together.
So that has gone very well. I’ve talked to people from both firms and they’re very, very happy that they were able to get that done and they’re very happy about how it’s gone since.
Chris: That’s excellent, well they’re definitely a firm to be watching as they continue to grow and make waves.
Kent: Yes, agree.
Future Managing Partner Qualities
Chris: Let me go to another question, so you’ve been around a lot of leaders who have all different kinds of skills and characteristics about them, I wanted to ask you, if you could share with our listeners what you find to be the single most important characteristic or skill for future managing partners or chairmen of law firms, particularly corporate defense firms?
Kent: Yeah, it’s a great question Chris and it often depends on the firm, what qualities are most important and as an aside, I would mention that part of our work in the area of management consulting with firms is sometimes focused on helping firms transition leadership from one generation to the next and as part of that work we often are focused on what the attributes are that partners think are most important in their leader and the attributes vary that are important from firm to firm.
One quality that I think is a common thread as I think through the most effective Chairs that we’ve worked with, one quality that’s important is that they are committed to developing a vision to what they want to build with their partners for the firm’s future and they’re committed to a vision that differentiates the firm, lets it stand out from the pack in attracting and recruiting clients and talent that are most important to the firm, and they also are committed to the concept of developing a plan to achieve their vision. Most importantly maybe they are committed to the concept of making hard choices in developing that vision in a differentiated position in the market. In other words, they are not the kind of people that say, “We could be all things to all people. We could be the best at every practice. We could serve every kind of client,” but instead they’re willing to place their bets, in other words making choices about in what areas they want to grow preeminence, knowing that they, like all organizations, are not going to have enough time or enough money to be the best at everything. So they understand the need to make choices in developing a vision and a plan to achieve it.
I think it a little bit longer answer Chris than you may have bargained for, but I think that’s all really important and people who are in law firms, especially in the competitive environment that we’re in now.
Chris: That was an excellent answer, very articulate and I appreciate it. People who are leaders understand the importance of what you’re talking about, needing to be the captain of the ship, making things move forward.
Let me ask, it may require another response, maybe it’s the same, but what words of wisdom do you have for law firm leaders in this current environment and economy? I know you see a lot of things going on and you’re advising your clients on how to navigate that, what are law firm leaders needing to hear almost prophetically about what’s coming down the pike and how they need to position themselves?
Kent: The definition of success is different for different firms, everything is relative, so it’s hard to give a one-size-fits-all set of suggestions to firms, but I guess what I would say is that it’s really important, as a leader of a firm, that you clearly define where you want to compete and when I say, “where”, I don’t just mean geographically where, but I also mean in what subset areas of practice and subareas of practice and also what industry sectors you most want to serve if serving by sector is relevant to you.
So you want to define, in other words you want to define the market in which you’re competing and I use “market” broadly to mean industry sectors, practice areas, geographies, you want to define the markets you’re competing in, in a way that you can be preeminent in them, you can be a winner in them.
The analogy, imperfect though but an analogy is, if you were playing a sport as a law firm, you can define the boundaries of the playing field, so go ahead and define them carefully in a way that you’re going to be successful on that field. Don’t try to play on a field where you are fighting on too many fronts given what you have to work with and the team that you have to compete with, but define the boundaries of that field so that you can win on it.
It kind of goes back to the point of needing to make choices about what you want to be preeminent in, knowing you can’t be preeminent in everything.
A couple of other things I’d mention, I think you want to look at some of the firms that you aspire to perform like and look at what they’re doing. I know that if generally you look at the highest performing firms in the legal market, you generally find that they are making choices about what they want to be known for and the most profitable firms are doing their best to build in areas that are less rate sensitive, rather than building in areas that are more rate sensitive. They’re realizing that they need breadth and depth in the areas in which they choose to preeminent. So after deciding in what areas they want to be among the best, they’re prioritizing the use of their time and their money to build in those areas that they’ve identified where they want to place their bets.
So those are some of the things, you know, a couple of others, I think you’ll find if you look at the highest performing firms, they have a lower tolerance for attorneys that chronically, on a multiyear basis, under-perform the firm’s expectations. They also have a lower tolerance for practice areas and offices that chronically under-perform the firm’s expectations and if anybody’s listening to this saying, “Well what are the expectations?” I think step one is to make sure that, as part of your strategic plan, you have clearly defined expectations, expectations of what it’s going to take to become and remain successful on the firm, either as a lawyer or a practice area or in offices.
So those are some of the things that the higher performing firms are doing that the whole market can learn from.
The 2016 Presidential Elections
Chris: Excellent, well I appreciate. A couple of things I want to ask you about now, it might be a bit more current news, I don’t know if it comes up in, say in conversations over meals with your clients or drinks, but let me ask this, what’s the sentiment about the elections now, are you find firms holding back, seeing who’s going to take office? What are you hearing?
Kent: You know, you and I are talking the day after the second presidential debate in St. Louis last night and just a few days after the Trump tapes were released in which he was speaking vulgarly about women in an interview with Access Hollywood, but that’s the context. So the people I’ve talked to in the past couple of days, I think almost everybody is hoping to just get past the election. Most believe that Hilary Clinton is going to prevail at this point but not everybody, there are a couple of firms where the leadership is committed to the Republican ticket.
Chris: Look at Giuliani.
Chris: I mean, Giuliani is incredibly outspoken.
Kent: Yeah, one of the most high profile spokespeople in the race today is Giuliani who was, of course, at Bracewell & Giuliani for years and then left to go to Greenberg Traurig more recently and took a leave of absence from there very recently to focus on the campaign.
Do you know, I think in most firms that we work with and we’re familiar with, there’s typically a balanced approach to politics. There are some people on the firm who are on the left and others who are on the right and in most firms there’s room for everybody and I’m talking about the larger firms, you know, in the Am Law 200. If you look at it, there’s some very fine firms like O’Melveny, you’ve got very high level partners who are active on a democratic side and very high level partners who are active on the republican side and the same is true at Jones Day, at Greenberg Traurig and other places.
So in most firms there’s room for diversity of views, that’s the observation I would make.
Chris: Switching to another subject, I imagine some of your clients aren’t going to be affected by Brexit. What are you finding as far as engagements and conversations with your clients around that? I imagine it affects mergers maybe?
Kent: So yes. I would say there’s increased interest on the part of a number of UK firms that are exploring opportunities to grow in the US, including through combinations. There is a level of uncertainty and everybody who has done business with the folks in the UK know, the current schedule is for the UK to formerly service notice on the EU that they’re going to leave the EU and that’s planned for March of next year. So people have that on their minds and on their calendars.
My take is that there’s both an increase on the number of UK firms that are exploring opportunities to grow in the US and there’s also an increase in the number of certain segments of firms in the US market that would entertain a combination with a UK firm.
There’s a sentiment broadly that the UK is going to remain an important center of finance, it’s going to continue to remain important because it’s English law that controls the vast majority of high-stake transactions and litigation around the world and there’s also a sentiment among many leaders of US firms that this may be the window of opportunity where it’s possible to buy low if you will. In other words, the UK law firm market is not overvalued at the moment is the thinking of most people and so there’s a number of firms that say, “Well maybe this is the right time for us to explore opportunities there.” That’s been my take talking to Chairs, both in the US and in the UK.
I’ve spent a lot of time in London lately because of the interest in that market and growing in the US and I think you’ll probably see at least one transatlantic combination in the next 12 to 18 months, maybe more than that.
Unfunded Pension Liabilities
Chris: Yeah that makes sense, absolutely, I can understand people taking advantage of the opportunity.
I want to bring this up, I knew I was going to have this call with you and so I wanted to talk to you about an elephant in law firm world, related to the balance sheet. So I have an auditor’s background, an accounting auditor’s background and I’d love to get your thoughts on unfunded pension liabilities. Is that something you guys are talking to your clients about, is it a concern or a worry if the waters to recede and we have another 2008?
Kent: It’s a great question Chris. It is a concern in some firms, particularly those that are interesting in doing a combination and worry that if having an unfunded pension could make them less attractive to firms that otherwise would be good firms to combine with.
I haven’t seen too frequently an unfunded pension be an insurmountable block. There’s creative ways to get over hurdles like that typically, but it is a concern in some firms that have them.
I would say more and more firms are acting to address unfunded liabilities like that that they may have and sometimes they freeze them and find ways to shrink the liabilities. In other ways they find ways to get the liabilities off their books. Other times there’s way they could balance obligations between the two firms, the two combine and one has them, in a way that feels fair to both sides.
They are a worry to some firms that have them but they’re infrequently an insurmountable hurdle has been my experience.
Twitter & Kent’s Content Consumption
Chris: Yeah curious. Thank you, I appreciate you answering that. Let’s shift to a little bit more personal, tell me how are you consuming content these days, what are you picking up, what are you reading?
Kent: A great question again. You know, I am a heavy Twitter user.
Chris: I was going to ask you that.
Kent: I know some people are and some people aren’t. Yeah, my experience on Twitter has been that if I follow journalists who I otherwise would read if I wasn’t using Twitter, if I follow them and people that they follow who are involved in the business of law and also in other topics that are of interest to me, I end up getting most of the content that I need by just simply scrolling through my Twitter feed.
I also like Twitter because it’s something that, when I have a few minutes, either on a ride to the airport or waiting for a flight or in between calls and I want a quick check in to see what’s happening in the world, I can quickly scroll through my Twitter feed and spend, two, three, five, ten minutes on it and get a pretty good sense of what’s happening.
For me though it’s all in who I follow, it results in being able to know what’s happening in the world. So I’ll follow, I read The Wall Street Journal and The New York Times and The Washington Post and a lot of the mainstream outlets that a lot of people read, but then also I’m interested in the business of law because of what I do for a living. So I’ll read journalists that cover the legal sector. I also follow Chairs of firms that are active on Twitter that I work with, that I know, sometimes partners in firms who aren’t in leadership roles but are opinion leaders in the industry and in their firms.
So I find if I follow the right people Twitter does a great job of keeping me informed.
Chris: I’m a huge Twitter follower as well and that’s how I was noticing so much of what you’re up to. Do you have any you want to call out, to have people follow as well?
Kent: You know, I think Frank Aquila at Sullivan & Cromwell in New York is a great follow. He both tweets about sectors that he has clients in, he tweets about macroeconomic news, he tweets about politics, a lot of topics that are important to clients that he works with and others that he has relationships with. He also will tweet about personal pursuits, what the good restaurants are that he’s going to, whether he’s in New York at home or traveling in Asia or elsewhere and I like Frank a lot and an extremely thoughtful, smart, capable M&A lawyer, you know, at the kind of center of that universe on Wall Street. So he’s a good follow.
Mitch Zuklie at Orrick is another good follow, the Chair of Orrick. You definitely stay up to date on the news that’s important in the legal sector at Orrick with Orrick’s clients and others.
Some people when they tweet are all about just re-tweeting and sharing content, which I personally find very useful, but Mitch is very good about creating original content, original thoughts with his tweets as well, so I think he’s a good follow also.
There’s others out there but some people, especially of the generation that runs law firms, sometimes are skeptical of Twitter, but I personally find that if people just try it, even for a week or two, and as long as they get help following people that are going to be of interest to them, they often feel like it’s very valuable.
Some people say their email box is overloaded every day and they have trouble, especially people who run firms who just have a ridiculous amount of incoming, hard to get through all of it, and I actually found that relying more on Twitter, less on email to keep in touch with what’s going on, is actually more efficient and effective for me to stay in the loop on the industry and news of the day.
Chris: Yeah, I love that tip. So I bet Jack Dorsey appreciates your Twitter shout out…
Kent: Yeah, I’m not going to get paid a fee just because they want to get a deal done, but I personally find Twitter extremely valuable.
Chris: That’s great. Have you been tracking the possible purchase of Twitter?
Kent: I have, I find it very interesting and we’ll see what happens. It seems like there’s been, at least in the past 48 hours a so, a little bit of a lull in interest, but they may just be posturing, but I think there’s a lot of value in Twitter personally.
Chris: Yeah, I do too personally and it will be interesting to see who picks them up. It sounds like Salesforce is really trying to win the bid.
Kent: That’s right, yeah.
Kent’s Bucket List
Chris: Yeah. Another question I’d like to ask you is, do you have anything left on your bucket list that you’d still like to get done?
Kent: Absolutely. So Chris, are we talking personal or professional bucket list here?
Chris: I go personal, but you can do professional too.
Kent: Personal, it might not be so exciting but I do have some things. I want to go to Wimbledon one day, I grew up a tennis player and until I was about 12 years old I was convinced I was going to be a pro tennis player and then reality set in somewhere along the way. But I grew up going to the US open every year, I grew up just outside of New York City and I’ve never made it to Wimbledon, so that’s on the bucket list.
I’ve got a milestone birthday later, I guess early next year and I’ve made it known to my wife that that’s the bucket list, I’m going to Wimbledon.
Chris: That’s excellent, what about the professional side?
Kent: On the professional side, I’d be interested in continuing to facilitate more very meaningful transactions that help firms achieve their aspirations. I think there’s certainly been a lot of consolidation in the sector and the data supports that. There has been a little bit of a lull on how many announced deals there has been in the last quarter or so, but based on the activity we’re seeing I think that we’re going to continue to see high deal count this year, next year, for the reasonable future. But if you look at the deals, most of them involve larger firms combining with smaller firms and those deals are valuable. I mentioned a few that I’ve been involved with, we’ve just landed some others, but I think we’re also going to see some larger transactions that will add a lot of value to the firms and their clients.
I’m involved in some potential larger transactions and I’d like to get more of those done. So that may be a quote in your term, a bucket list item, but that’s on my mind and something that I’m very committed to.
Dentons and the Race to 10,000 Lawyers
Chris: So second to last question. Dentons made huge waves by becoming the largest Swiss Verein in the United States, or in the world really, do you think the other firms are trying to compete as far as headcount in what they’re doing? I’d love to hear your feedback on that, I know you’ve worked with very large law firms.
Kent: I do think that some firms are in a race for market share and they view a gross revenue as a proxy for market share, which I think is fair and there are certainly some firms that see what Dentons has done, which is not easy at all to pull off and some other firms say, “Well wait a second, we’re not going to let them run away in a race for market share, we’re going to try and keep up with that.”
I and many others believe that the largest firms are likely on a march to a day where there will be a 10,000 lawyer firm or a dozen 10,000 lawyer firms. I don’t think that that’s particularly far off actually. We’re seeing far-fetched even just five or ten years ago, but I think that will happen in the near to mid-term. So there are some firms that are in that race.
I would say, kind of going back to a thing that we talked about earlier, it’s all about how you define your market. If you’re defining your market as using geography and you want to be a preeminent global firm, or the preeminent global firm, then you’re going to need to grow really large and have breadth and depth on a global basis. That’s the pursuit that I believe Dentons is on as well as a number of other global firms around. But if you’re defining your market as preeminent in the US or in a region of the US or just in private equity and high-stakes litigation or whatever it is, you need to have breadth and depth in the markets that you choose to be preeminent in.
So it doesn’t mean everybody needs to be on a march of 10,000 lawyers, you really just need to know in what way you want to be preeminent, whether it’s in a geographic way, a practice area way or in an industry sector or in a combination of those things and then you need to be among the biggest, it would be our view in the markets that you choose to be strongest in.
I do think though, to circle back to your question, I do think that a number of firms are interested in chasing Dentons in the pursuit of market share and that’s a strategy that some firms have.
Chris: Yeah, that will be exciting to watch, I was curious about that.
So last question, stealing this from Kai Ryssdal of marketplace.org, in five words or less, what is your job Kent?
Kent: Helping firms achieve their aspirations.
Chris: Excellent, that’s great.
Kent: I feel like I’m doing a crossword puzzle Chris.
Chris: Well, you know, I like to challenge and you passed the test, that was excellent.
Kent: Thank you.
Chris: So thank you everyone who listened to this episode of the Law Firm Leadership podcast. If you like this podcast leave a review on iTunes, also please share our podcast with others via email or social media. To share our podcast, listen to more shows or to read the transcription of this audio, go to liongrouprecruiting.com/podcast.