THE MAJORITY OF New Hampshire’s law firms—currently about 92 percent—are firms of five or fewer attorneys (see chart). As more clients are looking to have all their legal needs met in one place, some of these smaller firms are feeling the pressure to increase the range of legal services they offer in order to remain competitive.

For many of these firms, the answer is obvious: merger.

Mulhern & Scott, a small Portsmouth law firm of two attorneys (and one of counsel), found that its focus on estate planning, trust administration and business law meant that it couldn’t provide clients with the various other legal services that they required. "We had reached critical mass of growth in terms of our small, specialized practice," said David Mulhern, a founding member and partner of Mulhern & Scott. "We decided that the best way to address future growth was a law-firm merger."

Mulhern & Scott shopped around, talking to various larger firms about the possibility of merging. They eventually worked out a deal with Pierce Atwood, a Portland, Maine, firm of about 100 lawyers that also has offices in Augusta, Maine, and Newburyport, Mass. Pierce Atwood was, coincidentally, looking for a small NH firm to merge with at the time. The two firms had worked together previously on corporate transactions and knew that joining the firms would be a good fit. "We were comfortable with each other and compatible in terms of style of practice," said Mulhern. "Our practice synergies and personal energies went together well."

As a result of the merger, Mulhern and his partner (and wife), Sally Mulhern, are now partners of Pierce Atwood. They continue to work out of Pierce Atwood’s Portsmouth office, formerly the Mulhern & Scott office.

For Mulhern & Scott, the main benefit of the merger is growth, said David Mulhern. In addition to it strong trusts and estate planning practice, the firm can now also provide clients with the services of Pierce Atwood’s nearly 100 other attorneys. "We have drastically expanded our range of services. We are now a full-service law firm, before we were relatively a boutique firm," said Mulhern.

The merger has enabled Pierce Atwood to enter a new marketplace—NH. They are also benefiting from the Mulherns’ knowledge and experience in their practice area. "For us, this was an opportunity to create a presence in NH and to join a fine firm," said Bruce Coggeshall, managing partner of Pierce Atwood.

"I think everyone benefits: We have brought highly skilled talent into our firm to join our estate planning practice, our NH clients now have a Pierce Atwood office in their state and [Mulhern & Scott] can now offer a full range of legal services—from patents to environmental law to litigation," Coggeshall said.

The joining of Hillsboro law firm Hatfield, Moran & Barry and the Concord firm Upton, Sanders & Smith was a merger of a different color. Both firms do a considerable amount of work in the areas of municipal and school law and their attorneys frequently worked together on cases, so the two decided that joining forces in this area of practice would be beneficial to both firms.

Hatfield, Moran & Barry is a firm of five attorneys; Upton, Sanders & Smith has 12 ATTORNEYS? on staff. Merging the firms "gives us more people to handle the caseload," said Gary Richardson, an attorney with Upton.

"This gives us a depth in our practice. We could have expanded with more lawyers, but because our practices complement each other, we decided this was the way to go," said Hatfield, Moran & Barry partner Tom Barry.

Richardson agreed that joining forces in their specialized area of practice enables the firms to further strengthen their position in municipal and school law. "Within that area, clients are looking for us to be able to handle labor law, administrative law, special needs cases. This gives us the ability to expand the services we have available," he said.

In addition to school and municipal law, Hatfield, Moran & Barry also does work in financial planning and Upton, Sanders & Smith does a considerable amount of litigation work—which both firms feel further complement each other.

The merger means an increased ability to serve clients’ needs, agreed Barry and Richardson. "Because of the depth of lawyers we now have, if one is tied up, another can step in to service the clients. Rather than turning away clients, we now have the capacity to meet their needs," said Barry.

The merger also increases the level of expertise of both firms. "If a client comes to us with a question that requires a lot of expertise in a particular area, if I don’t have it, I can turn to one of the partners who does," said Richardson. "Within the firm we can allocate work to the person with the most expertise as it pertains to the case. Clients like that, it’s in their best interest," he said.

The law firm merger went into effect Jan. 1, 2001. Because the Upton, Sanders offices in Concord are at capacity, the merged firm will continue to maintain an office in Hillsboro.

According to Richardson, the two firms had been considering joining forces for about five years. "It wasn’t something we did lightly," he said. "We felt comfortable with each other and saw a great chance to put together our complementary strengths to form one stronger organization," Richardson said.

Although it’s not technically a law firm merger, four of the five attorneys from the now-dissolved Dean, Rice & Kane have returned to Manchester’s Devine, Millimet & Branch, the former law firm of their predecessors. Dean, Rice & Kane was founded as Merrill & Broderick by former governor Steve Merrill and current Supreme Court Associate Justice John T. Broderick, both former attorneys with Devine Millimet.

According to Susan Duprey, president of Devine, Millimet & Branch, her firm has essentially opened a Concord office by bringing in the four Dean, Rice & Kane attorneys—they will continue to work in their former office. Emily Rice was the only attorney who opted not to go with the move, she is now working with Orr & Reno in Concord.

Duprey said that when she became Devine Millimet’s president three years ago, she wanted to bring attorney Mark Dean back to his former firm, but Devine Millimet wasn’t prepared to open a Concord office—where Dean wanted to practice—at the time. Discussions of bringing in Dean, Rice & Kane’s attorneys resurfaced last fall; by then Devine Millimet was ready to have a Concord presence, said Duprey.

According to Duprey, Devine, Millimet & Branch—a firm of about 78 attorneys that began in 1949—has expanded its governmental relations and utilities practices with the addition of the Dean, Rice & Kane attorneys, who did much work in that area of practice. Also, opening a Concord office enables Devine, Millimet to be closer to the Legislature, which is also beneficial to its governmental relations attorneys. And Devine Millimet hopes to expand its Concord client base with its new office.

Duprey said that as a part of Devine, Millimet & Branch, the former Dean, Rice & Kane attorneys will benefit from the full range of services that their new law firm can provide. "They weren’t able to provide that range of services as a small firm," said Duprey. "If a small firm’s client has to go to another firm for certain services, the client may form a relationship with that other firm and there’s a chance that the smaller firm may lose the client," Duprey said.

Many of the attorneys whose firms have merged see a national trend toward smaller firms merging with larger to expand the range of legal services they can provide and, therefore, stay competitive. That trend has hit NH to some extent, but because there are so many successful small firms in the state, it is unlikely that large firms will take over in NH as they are elsewhere in the country.

Duprey believes that small firms will continue to be successful in NH because they can specialize in one area of practice, identifying themselves as niche, or boutique, firms. Attorneys even opt out of large firms to open such boutique practices. But small, unspecialized firms will find it hard to compete against larger firms that offer a wide range of services, said Richardson. "They’ll either have to become a boutique and do a very limited, specialized practice or expand to a larger firm," he said.

Duprey also believes that there is a significant amount of pressure on medium-sized law firms, of which there are few in NH. Such firms find themselves caught in the middle, between small, specialized firms and larger, full-service ones, said Duprey. "It’s easier for smaller firms to be niche firms. When a medium-sized firm gets up to a certain size it’s competing with larger firms, but it’s unable to offer all the services of a larger firm," she said.

Duprey believes that the real trend might be a decrease in the number of medium-sized firms across the country. "The crunch is on those firms. There’s a likelihood that such firms will try to get bigger to expand the scope of services they can provide," Duprey said.

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