Taft looks for more mergers as it closes Denver deal
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Just a few weeks after announcing a new merger out west, the Midwest-founded law firm of Taft Stettinius & Hollister LLP is setting its sights on future partnerships in Florida and the Northeast.
Taft, which has the second-largest presence of any law firm in Indianapolis, is looking beyond its Midwestern roots to establish a full-service firm in several major regions across the United States.
Experts say the move reflects a national trend of increasing client demand for deep legal specialists who often can only be acquired through mergers.
Robert Hicks, the Indianapolis-based chairman and managing partner at Taft, said he believes mergers are the future of law firms, and he has his eye on several prospects.
“I’d say I have one good prospect and two or three that are sort of in that next tier of preliminary. But that’s not unusual. That’s always the case,” Hicks said
“They’re all outside the Midwest, they’re all Northeast or Florida mostly. Those are the two right now.”
In January, Taft will finalize its merger with the Denver firm Sherman & Howard, whose recognition as a leading law firm in the area is expected to help Taft reach new clients and bring broader expertise in some areas to existing customers.
“We have a great reputation. And those are the types of firms that Taft is looking for as it expands, to reach the goal of being the top middle market firm in the United States,” said Stefan Stein, chief executive officer of Sherman & Howard, said.
Hicks said Sherman & Howard also will bring strong specialty practices in bonds and private wealth to Taft.
“They’re known as a bond firm, much like ice Miller is here (in Indiana), and Taft has a good bond practice, but to layer their strength and bonds across our platform will be a very synergistic thing for us,” Hicks said.
“It’ll really give us a lot more breadth and become known more as a bond firm. That’ll help us here as well, and it helps us really in all of our markets.”
A quick move
The Taft and Sherman & Howard merger came together relatively quickly. Hicks said a typical merger process takes around one and a half to two years from first meeting to closure.
But the deal in Denver came together in 11 months, he said, largely because the two firms knew early on that the pairing was a good fit.
“When we really looked at everything, we found this great match of clients, culture, and also economics,” Hicks said. “It was uncanny how similar those things lined up for us.”
When assessing potential mergers, Hicks and his team prioritizes making sure staff work well together and enjoy doing so.
Ultimately, the goal is strong collaboration between the firms, which will satisfy both sides.
“I love the fact that we’re going to maintain a level of independence, but under the larger Taft umbrella,” Stein said. “So to me, you kind of get the best of both worlds.”
This approach also helps those at the local firms feel like they’re part of the larger goals the firm has, Hicks said. Taft has a “no cut” policy, meaning staff are not released from their roles just because a merger is happening.
This effort to maintain local leadership at partnering firms is part of Taft’s “One Taft” delivery model, which prioritizes local market and community commitments while promoting innovation, collaboration, and high-quality services across the firm.
“Each of our markets has great economy to run themselves,” Hicks said. “When these firms merge with us, our pitch is, ‘You guys still run your market, we’re not going to get in your hair over it.’ Ninety-eight percent of the decisions are made locally anyway, but you’re also at the adult table.”
National trend
While Taft’s presence in the Midwest includes major cities like Indianapolis, Detroit, Columbus, and Chicago, the firm is steadily expanding to different regions in the United States.
Ohio-founded Taft merged with Indianapolis firm Sommer Barnard in 2008. Its Denver venture is the firm’s first in the Mountain West.
Taft’s merger in Denver, which closes at the start of 2025, will kick off what is likely to be another year of growth in law firm mergers across the United States, according to data from the merger research team at Fairfax Associates, a legal consultancy group with offices in Washington D.C., California, and London.
According to data released on October 1, Taft’s merger is one of seven already announced for next year.
This merger is the third largest on the horizon so far, behind Troutman Pepper with Lock Lorde (1,630 lawyers) and Womble Bond Dickinson with Lewis Roca (1,162 lawyers).
For Taft, its westward merger will add 125 attorneys, bringing its total to more than 1,000. In Indianapolis,
Taft has 172 attorneys, making it the second- largest law firm in the area, according to Indianapolis Business Journal research. Indianapolis based Barnes & Thornburg LLP is the largest, with 197 attorneys.
Lisa Smith, principal at Fairfax Associates, said law firm mergers peaked nationally in 2018 but the number has gradually grown after being stalled during the pandemic.
“I think we see the financial performance of firms is getting wider and wider, and so I don’t know that we’re going to get back to those [2018] levels,” Smith said. “I think there will continue to be consolidation, but I’m not sure we’ll get back to sort of the peak levels.”
However, Smith said her firm is still seeing a growing number of firms pursuing mergers.
Data from Fairfax shows 2024 has already seen 41 completed mergers as of the year’s third quarter, matching last year’s Q3 total. The company expects at least two more completed mergers in Q4, putting the year’s total at 43.
She said the deals are often a growth strategy for firms with attorneys in the hundreds range that are looking to expand their offerings and connect with a larger firm.
“I think we’ve seen more mergers in the last year or so of firms where the smaller firm was sort of in the 100 to 200 or 250 range,” she said. “But for a full-service firm, especially if it’s a full-service firm across multiple offices, that can be a challenging size to have the scale of practices that are required.”
For Hicks, there’s no doubt that more mergers are coming.
“You kind of need to be in more markets and you need to be bigger,” he said. “If you don’t, you’re kind of living yesterday’s economy.”