Rise of Reed Smith, K&L Gates reflect their leaders' vision and market forces

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For two very different guys, Reed Smith's Greg Jordan and K&L Gates' Pete Kalis have a lot in common. The two West Virginia natives rose to lead their respective Pittsburgh-based law firms well more than a decade ago and both have recently won unopposed elections to additional terms for the next three and five years, respectively.

Those nods from their partnerships, with Mr. Jordan's coming just last week, is perhaps a sign of thanks for each man's work in taking their firms from regional presences to global powerhouses -- though both Mr. Kalis and Mr. Jordan are quick to point out it is a team effort and one driven by the requirements of the market during their tenure.

Each man has about 10 large-scale mergers under his belt, bringing their firms from a few hundred lawyers to around 1,500 or more. They each went from a few offices in the mid-Atlantic region to more than 40 at K&L Gates and more than 20 at Reed Smith. They each grew their firms' revenue from about $300 million to around $1 billion in that time.

Both men began their firm leadership positions --Mr. Kalis in 1997 and Mr. Jordan in 2001 -- with an eye toward expanding their firms nationally and then internationally.

While California was a big part of the firms' U.S. growth, London proved to be a critical expansion for both firms. Reed Smith's 2007 merger with Richards Butler resulted in London soon turning into the firm's largest office and led to a 2008 merger with Richards Butler Hong Kong, starting what would become a four-office presence for Reed Smith in Asia.

In 2005, Kirkpatrick & Lockhart's merger with London-based Nicholson Graham & Jones was part of the Pittsburgh firm's thinking that entering London in a meaningful way was the key to the firm's eventual European and Asian expansion. The firm's clients were starting to migrate that way and the firm needed to as well, Mr. Kalis said.

After London, K&L Gates quickly expanded into Asia with its 2007 merger with Seattle-based Preston Gates & Ellis, a firm with three offices across the continent. Then came offices in Germany, Italy, France, Poland, Brazil, the United Arab Emirates and a number of other cities. At the same time, K&L Gates underwent several large-scale mergers in the United States, expanding into Chicago, Charlotte, N.C., Raleigh, N.C., and Dallas, among other places.

The last few years have slowed large-scale expansion for both firms to a degree, but K&L Gates is back in the saddle, engaging in merger discussions with Australian firm Middletons. That would give the firm 1,400 lawyers in the United States and 700 across Europe and Asia.

Despite transforming their firms into some of the largest in the world, both leaders have more on their agenda. Each firm has spent years looking at how to enter Houston. Both men mentioned Canada as a potential growth target in the future. Mr. Jordan said his firm would also have to start looking at places like Brazil and Australia.

While Mr. Jordan said he thinks expansion will continue, it won't be the "big bang mergers" seen in the past, but rather would come in smaller steps. The risk with larger-scale mergers is heightened even more in a difficult economy, he said.

K&L Gates' growth "was market-driven and the market changed so rapidly that it drove that change all within a really compressed timeframe which happened to be on my watch," Mr. Kalis said.

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Gina Passarella: gpassarella@alm.com or 215-557-2494. To read more articles like this, visit www.thelegalintelligencer.com.


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