Womble Carlyle, North Carolina’s largest law firm, is entering the Charleston, S.C., market by acquiring the city’s largest law firm.
In a merger fueled by the prospect of rapid economic growth in the Charleston area, Womble is joining forces with Buist Moore Smythe McGee. They will complete the deal April 30, partners at the firms said.
With offices in six states and Washington, D.C., Womble Carlyle Sandridge & Rice has more than 500 lawyers and describes itself as a full-service business law firm. Buist, with roots dating back to 1827, describes itself as a “business-focused” firm and has 44 lawyers, all based in Charleston.
“We’re just very excited. We think this is a great opportunity,” said Henry Smythe Jr., managing director of Buist.
“Womble Carlyle is larger and offers many different areas of practice that we would like to have,” Smythe said. “At the same time, we offer them our platform in Charleston in some significant areas of practice that are helpful to them as well.”
Keith Vaughan, chairman of Winston-Salem-based Womble, said the merger allows his firm to advance its strategy of expanding in an economically strong Atlantic Coast region extending from Georgia to Delaware.
“What we see in Charleston is a strong economy transforming into an even stronger economy with the arrival of Boeing and with the port opportunities that are building on a strong port to begin with,” Vaughan said.
“You have a significant economic area developing in the same general proximity as where a lot of our offices are already located, and right in the middle of that is an outstanding law firm — Buist Moore — that, culturally and otherwise, fits perfectly with Womble Carlyle,” he said.
Rumors about a merger between two firms based in the Carolinas had been circulating before a representative for Womble and Buist contacted Lawyers Weekly, a sister publication of The Mecklenburg Times, this week about their merger. The firms had planned to announce the deal next week.
In the short term, the deal gives Womble a second South Carolina location in addition to its office in Greenville, S.C., boosting the number of its Palmetto State lawyers from 26 to 70.
After April 30, Buist lawyers and staff will work under the Womble name at their current offices in Charleston, and its lawyers will transition into Womble practice groups.
Tom Clay, a principal at Altman Weil, a management consulting firm for legal organizations, said law firms typically avoid big changes in salaries or personnel when combining staffs.
“It depends on who the acquiring firm is and what their method of operation is,” he said. “But, generally, salaries don’t jump hugely initially because nobody’s going to subsidize anyone else. And they usually don’t go down either because nobody’s going to vote for a deal where they going to make less money.
“More often than not, right off the bat, everybody’s thinking that they’re going to make what they usually make, and what they hope is all these synergies come about as a result of the merger and they’ll make more money.”
As for personnel transfers, it would be a good idea for Womble to locate lawyers in the Buist offices, Clay said.
“There is no downside,” he said. “It’s all benefit because you begin to acculturate and integrate much faster when that happens.”
Vaughan said no immediate transfer of Womble lawyers into the Charleston office is planned.
“If someone wants to move to Charleston, we will encourage that,” he said, “and Buist Moore has said they will encourage it. But it’s not an immediate task on our list.”
The merger also allows Womble to tap into Buist’s strong practices in construction law and maritime and admiralty law, areas where Womble hasn’t had practice groups before. The firm plans to set up groups in both areas, Vaughan said.
The Boeing factor
The two firms began discussing the merger after Womble approached Buist last summer, Vaughan and Smythe said. For the firms, a key consideration was the prospect of rapid economic growth in the Lowcountry as Boeing starts up its newest aircraft assembly line.
“You know, you see something like Boeing moving into Charleston and all that that means, and, looking to rapid societal change, we just think the future’s going to be different for law firms,” Smythe said.
Boeing is expected to spur suppliers to locate in the Lowcountry, creating jobs and pulling in new residents. For law firms, that means more clients whose legal needs extend to other states and even overseas, Smythe said.
“We wanted to be out in front and able to provide a wider range of services and a deeper bench in order to assure our clients that we would be and could be the firm they need us to be,” he said.
The plant, in north Charleston, is scheduled to start rolling out Boeing’s new 787 Dreamliner passenger jets in the next few months, said Mary Graham, senior vice president for public policy and regional advancement at the Charleston Metro Chamber of Commerce.
In its most recent annual economic forecast, the chamber predicted “measurable strength and expansion in every sector” of the region’s economy in 2012.
“Part of our outlook in terms of what the economy is going to do is based on the fact that Boeing is opening in just a couple of months, and we feel like that’s going to really be a big boost to the economy,” Graham told Lawyers Weekly.
Boeing’s likely impact is comparable to the growth South Carolina’s Upstate region experienced after BMW opened its only North American plant in Greer, S.C., Graham said.
“I think we all look at the impact BMW had on the Upstate, and that’s what is anticipated here in terms of suppliers and those kinds of things relocating here because of Boeing,” she said.
“The world is watching to see it unfold as we begin to roll out the planes here and the customers from around the world come to Charleston to pick up their airplanes,” she said.
Drop in mergers
Clay said law firm merger activity worldwide has dropped in the past two years as result of the economic downturn.
But given Charleston’s economic prospects, “it makes eminent sense for a firm like Womble to look into that potential economic growth and want to get into the market with one of the preeminent firms that was already there,” he said.
“They don’t have to establish themselves and grow and build the brand and that type of thing. They’ll just be able to leverage off Buist Moore’s brand,” he said.
As to that, Womble will be launching a marketing effort “so that people in Charleston understand soon that Buist Moore and Womble Carlyle are now the same and that the lawyers they have come to love and respect are not going away,” Vaughan said.