Shefsky & Froehlich to Merge With Taft Stettinius & Hollister
With the end of the recession and waves of restructuring, layoffs and resource optimization in law firms, including the optimization of business models, 2013 seems to be pointing out one single truth - firms at all levels are feeling that they are too small to compete in their respective competitive spaces. Consequently many mergers are taking place. Such is the case of Chicago-based law firm, Shefsky & Froehlich. The law firm is merging with Cincinnati-based Taft Stettinius & Hollister staffed with 70-lawyer professionals. The merger talks have been ongoing for approximately two years and will come to pass in early January next year.
The trend of smaller Chicago law firms merging with larger out-of-town law firms has picked up pace in the recent times and Shefsky & Froehlich have joined the trend. The merger with Taft, one of the most successful law firms in the Midwest, will create an entity of about 400 lawyers exceeding the size of Schiff Hardin LLP and this merger will empower Shefsky & Froehlich to enter the competitive space it has been targeting.
It is clear that Shefsky & Froehlich was feeling the heat, even though it holds a stature of prominent law firms in city zoning matters with a robust casino-related practice. The need for the merger was put down squarely by Froehlich, Founding Partner of Shefsky & Froehlich. He said, "Litigation-wise we were great; transaction-wise we were not." Transactional attorneys with the required expertise did not want to join a small law firm, and the result according to Froehlich, was that the firm was being forced to give up on about $2 million a year, owing to lack of resources in labor and related work. The merger will help to increase revenue and keep back that work in the firm.
Of recent, a spate of smaller Chicago law firms like Bell Boyd & Lloyd LLP, Ross & Hardies, Lord Bissell & Brook LLP, Gardner Carton & Douglas, Wildman Harrold Allen & Dixon LLP, and Sonnenschein Nath & Rosenthal LLP have merged with larger law firms out of Chicago. However, the need to optimize and cut down on costs is not one-sided. Thomas Terp, Taft's Executive Committee Chair and Managing Partner said, "We actually see an opportunity in what is happening right now." According to him, this merger will help serve a growing number of clients who are getting tired of paying $900, $1000 or more an hour."
Taft is not new to mergers and has a history of six successful mergers in the past 13 years. This track-record helped to draw the attention of Shefsky & Froelich, a firm running at a good profit even with its smaller size.