What the Future Holds for 137-Year-Old Kenyon & Kenyon

There’s no way around it: the intellectual property law business has been disrupted. One only has to look at the number of IP boutiques that have either folded or been acquired by a larger, more general practice law firm for confirmation.

• Last June, Blank Rome acquired Wong Cabello in Houston

• Last August, Haynes and Boone acquired Mavrakakis Law Group in Chicago

• This March, Polsinelli hired en masse 44 lawyers from Novak Druce Connolly Bove + Quigg

The list goes on, and the next firm on it could very well be IP powerhouse Kenyon & Kenyon. Its managing partner Edward Colbert said it is exploring merger opportunities after a number of defections have hit the firm.

Colbert commented on how full-service law firms are poaching business from smaller firms as they build out Inter Partes Review and patent prosecution specialties to add one more notch onto their hefty and ever-expanding belts.

“I know people who are in IP practices who are saying they are seeing work go to general firms that they think are not qualified to do the work, but they aren’t even talking to the boutiques anymore,” said Colbert. “Is that going to stay the way in the future? I don’t know, but I notice a huge number of general firms are betting that that’s the case.”

If Kenyon does do a deal, Colbert said he would prefer combining with a larger, full-service firm, and not another IP firm, a number of which he said have approached him with overtures in recent months.

We’ve excerpted some key quotes from the interview below.

• “None of this happens over night. The statistics say that it happens over 18 months. I personally think if we were to do something and it was truly a strategic rather than incremental merger, I think the ramp up time would be much faster.”

• “Kenyon has its ratio of litigation to prosecution as 2 to 1. Then you also throw in opinion work and due diligence work, which work well with corporate work.”

• “Most of those Vereins are enormous. Conflicts are huge. The ability to have autonomy is in question. They aren’t true partnerships and that is how everyone at this firm grew up. Culturally, it could be quite a shock to make that jump.”

• “My position is, we are going to make the decision this year. We are going to do something or not... I don’t want to linger forever.”

• “We should know by mid to late 2016.”

• “I have been getting phone calls constantly from firms wanting to talk merger. Neither I nor my predecessor considered those calls. When I became managing partner, I started taking those calls and thinking about it.”

• “I personally think it makes more sense to merge with a general firm than with a firm like Novak Druce. There are any number of stand alone IP firms that have reached out to us to see if we would entertain a combination that results in a single practice firm. You end up with duplicative billing systems, and costs and IT systems. You can increase your profits in total but it wouldn’t change the long term view.”