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Thompson & Knight, Holland & Knight In Talks for Tie-Up (2)

April 9, 2021, 5:15 PM; Updated: April 9, 2021, 7:08 PM

Holland & Knight and Thompson & Knight announced on Friday that they are in talks for a merger that would unite two of the largest law firms from Florida and Texas, respectively.

According to a joint statement released by the firms and viewed by Bloomberg Law, the two are in the midst of due diligence in connection with the combination that they expect to complete in the next 90 days. A tentative closing date is set for the summer, the statement said.

The combined firm would have nearly 1,600 lawyers across 30 offices, placing it among the largest law firms in the U.S.

This proposed combination would expand significantly each firm’s presence in important geographic markets and would also improve the breadth of the services offered to clients in key industries, said Mark Sloan, managing partner of Thompson & Knight and Steven Sonberg, managing partner of Holland & Knight, in the statement.

“Most importantly, the combination would bring together two firms who share similar cultures, and who are focused on providing excellent client service in a collaborative and diverse environment,” they added.

The two firms are not providing further comment about the merger talks at this time, according to the statement.

‘Highly Sought After’

“This would be a big accomplishment for both firms,” said Kent Zimmermann, a consultant for law firm management at The Zeughauser Group, of the potential tie-up.

Dallas-based Thompson & Knight is the smaller of the potential merger partners, with roughly 300 lawyers in nine offices. It’s been known for its work in oil and gas focused private equity and M&A as well as strengths in other areas like real estate.

“Thompson & Knight has always punched above its weight in quality and still does and is highly sought after,” Zimmermann said.

Roughly a decade ago, the firm was in tie-up talks with Reed Smith, though those the deal ultimately fell through.

More recently, Thompson & Knight has faced troubles in the wake of the coronavirus pandemic.

It was among the nearly one-quarter of the country’s 200 largest law firms who obtained an emergency loan from the federal government as the Covid-19 pandemic raged last year.

The firm posted revenues of around 200 million in 2020, a more than 10% decline year over year, and saw a 16% dip in profits per equity partner, according to information provided to The American Lawyer. The firm at the time cited the major slowdown in energy work during the early months of the pandemic as a cause of the drop.

Thompson & Knight also recently saw some of its partners decamp. Alston & Bird opened its office in Fort Worth with six lawyers from Thompson & Knight in September. Earlier this week, Wesley Williams, leader of its corporate and securities practice, along with Jessica Hammons, joined Akin Gump Strauss Hauer & Feld in Dallas and Fort Worth, respectively. Williams now serves as co-head of Akin Gump’s energy team.

By merging with Holland & Knight, Thompson & Knight would immediately benefit from bigger scale and more bench strength across practice areas and access to a larger client portfolio in major commercial centers across the U.S., Zimmermann said.

All of Thompson & Knight’s U.S. locations are currently in Texas, except for an office in New York, according to the firm’s website.

Miami-based Holland & Knight, was founded in Florida and has roughly 1,300 lawyers across 27 offices, with strengths in government, litigation and real estate, as well as a strong Latin American corporate and securities practice. Last year the firm boasted revenues of approximately $1.045 billion, and consistently ranks among the top 100 richest firms in the country.

Holland & Knight also faced some pandemic-era challenges, furloughing some of its workers, cutting partner draws, and reducing salaries for its associates and staff, though those cuts were ultimately rolled back. It also shuttered its Anchorage, Alaska office in July.

The potential merger between Holland & Knight and Thompson & Knight is one of the largest announced thus far in 2021.

Merger talks are on the rebound in 2021 after firm consolidation slowed in the wake of the coronavirus pandemic last year, noted a report released this week by Altman Weil. In the first quarter of 2021, there were 26 transactions announced, putting tie-ups on pace to beat the total of 65 announced in all of last year.

(Updates to include information about firm performance and comments from Zimmermann)

To contact the reporter on this story: Meghan Tribe in New York at mtribe@bloomberglaw.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Chris Opfer at copfer@bloomberglaw.com

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