Troutman Pepper and Locke Lord merger talks have hit a hurdle over client conflicts.
Some Locke Lord affordable housing and energy lawyers may be unable to represent longtime clients after a merger with Troutman Pepper Hamilton Sanders, according to three people familiar with the matter.
At least a trio of lawyers have left Locke Lord, citing such potential challenges post-merger, the people said. The firms in a statement declined to comment on client conflicts and said merger talks are ongoing.
The conflicts snag, common in Big Law tie-ups, shows the complexity of patching together two large operations without having the combined firm represent many clients with adverse interests toward one another. Firms can seek conflict waivers, though clients often hesitate to approve them.
Troutman Pepper and Locke Lord first confirmed in April they were discussing a possible merger to create a firm of more than 1,600 lawyers. The new operation would rank among the 30 largest with more than $1.5 billion in revenue, based on 2023 figures.
Troutman Pepper in the past two years has represented large financial services companies and affiliated entities, including JP Morgan Chase & Co., Wells Fargo & Co., and Bank of America Corp., the firm disclosed June 20 in an application to represent a client in a bankruptcy case.
Those banks have provided financing to Locke Lord clients for housing development and energy deals, according to press releases by the law firm. The firm represented Tampa Electric Co. in two short-term credit facility transactions with financing from JP Morgan and Bank of America, according to a Locke Lord press release in April 2023.
A Troutman Pepper client, electric and gas company Ameren Illinois, challenged a request by Locke Lord for guidance on wind and solar generating equipment, a 2021 filing with the Federal Energy Regulatory Commission shows. The firm didn’t identify a client in the request.
Answering Concerns
Locke Lord told lawyers concerned about losing clients due to the merger that work would be made up through new business from Troutman, according to two people familiar with the matter. Some lawyers found that explanation unsatisfactory, the two people said. They spoke on condition of anonymity to protect relationships at the firm.
Sizing up a merger partner for potential client conflicts is a crucial—and typical—part of the pre-combination process, said Kristin Stark, principal at consulting firm Fairfax Associates. However, industry consolidation has resulted in fewer merger options for firms, in part because of the number of client conflicts, she said.
“The market has consolidated and segmented so much,” Stark said. “Instead of having 25 firms available, they now have three.”
A thorough conflicts check helps gain the support of partners, which is needed to approve a merger, she said.
Troutman Pepper and Locke Lord said in their joint statement, “Our first priority is delivering exceptional legal services to our clients, and until the point at which the partnerships of each firm hold a vote, there will be no further comments.”
Troutman Pepper was created by a 2020 merger between Atlanta’s Troutman Sanders and Philadelphia’s Pepper Hamilton. The combined firm brought in $1.07 billion in revenue in 2023, according to figures by the American Lawyer. It has 1,073 lawyers across 22 offices.
Locke Lord was created through the 2007 merger of Texas-founded Locke Liddell & Sapp LLP and Chicago-based Lord Bissell & Brook. Then in 2015, Locke Lord merged with Boston-found Edwards Wildman Palmer.
Locke Lord brought in roughly $500 million in 2023, according to American Lawyer data. The firm had 556 lawyers and 151 equity partners in 2023.
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