Law Firms Launch Alliances When Mergers Are Too Much to Bear

An unconventional law firm partnership announced Monday shows how attorneys are seeking the benefits of a merger without entering a full tie-up.

Two firms—Philadelphia-based Vaughan McLean and Buffalo’s Cohen Cunningham DeRose Higgins Lyon—are creating a new civil defense practice called Cohen Vaughan. The wrinkle is that the two underlying firms will keep some separate operations while practicing law as one entity.

“There are some philosophical and logistical differences that would have been hard to reconcile in a conventional merger,” Richard Cohen, chairman and chief development officer of the new firm, said in an interview. “There were so many synergies and opportunities for us, it wasn’t worth waiting to resolve the few speed bumps.”

Joseph Vaughan

Some growth-hungry firms are preserving legacy systems while gaining the merger-type benefits of combining practices, geographies, and referral networks. Greenspoon Marder and Davidoff Hutcher & Citron on Jan. 7 announced the formation of a referral partnership in which the firms send client work to each other while practicing law as separate entities.

In Cohen Vaughan’s case, the new firm will provide legal services as a single entity with 18 offices and 75 lawyers, including a headquarters in Philadelphia and back-office center in Buffalo. Vaughan McLean and Cohen Cunningham are continuing their operations—not to practice law—but to accommodate separate 401(k) plans, compensation systems, and associate recruiting approaches.

“We’re going to live in both worlds for a while,” said Joseph Vaughan, the founder and managing partner of Vaughan McLean, who is president of the new firm. “If we wasted time trying to iron out all the wrinkles, we’re losing out on all the opportunities that confront us.”

The new firm will collect about $30 million in its first year, Vaughan said, adding that the estimate is conservative.

‘First Dance’

Non-merger alliances can provide firms with some of the advantages of a full combination without sacrificing legacy systems or assuming financial liabilities of a partner, said Kristin Stark, a consultant with Fairfax Associates. “These partnerships can become lopsided if one firm sends more work than the other or if the level of expertise is one-sided,” she said.

Sometimes the partners do end up merging, Stark said. “It’s like a first dance,” she said of an alliance. “It can build trust and relationships.”

Greenspoon Marder, with its network of Florida offices, sees an opportunity to serve clients of New York-based Davidoff Hutcher that are expanding into the Sunshine State. Davidoff Hutcher, meanwhile, aims to get new work for its government and regulatory attorneys in New York by connecting with Greenspoon Marder.

“Neither of us was ready to embark on a merger,” said Gerald Greenspoon, co-managing director of Greenspoon Marder. “This became a more reliably available structure to begin working together.”

At the outset, Davidoff Hutcher is referring more work to Greenspoon Marder than vice versa, though that could even out as the relationship matures, Greenspoon said. A future merger is “always a possibility,” he said. “But that’s not the specific goal of the arrangement.”

Merger Option

Full mergers remain a popular option for law firms. Managing partners completed about 50 mergers in the legal industry in each of the last two years, according to data published by Fairfax Associates.

Eleven combinations are planned for—or have already been completed in—2025. Those include Troutman Pepper’s merger with Locke Lord and Ballard Spahr’s tie-up with Lane Powell.

Cohen, who prefers the alliance approach for now, is no stranger to starting and managing firms.

Richard Cohen

In 2001, he founded Goldberg Segalla, which according to its website now has more than 450 attorneys in 23 offices. He left that firm in 2021 to join McAngus Goudelock & Courie as chief development officer.

Cohen departed McAngus Goudelock last year to begin forming Cohen Cunningham DeRose Higgins Lyon with lawyers from Goldberg Segalla, McAngus Goudelock, Clark Hill, and Kelley Kronenberg.

The new venture with Vaughan McLean may face challenges ahead as lawyers from each legacy firm respond to different compensation systems, Cohen acknowledged. But keeping compensation systems in place is better than the disruption caused by one firm’s approach overtaking the other, he said.

“At some point it the future, the compensation platforms for those two communities will much more closely resemble each other than they do now,” Cohen said. “They may even be the same.”