Taft arrives in Michigan by merging with Detroit firm
Taft Stettinius & Hollister’s entrance into the Detroit market is another step toward the firm’s goal, adopted more than a decade ago, of becoming a “dominant middle-market regional law firm.”
Like it has in other Midwestern markets, Taft is setting up shop in the Motor City by merging with an existing firm. Starting in 2008 with its arrival in Indianapolis through the combination with Sommer Barnard, Taft is completing its sixth merger in 14 years by combining with Jaffe Raitt Heuer & Weiss, the seventh-largest law firm in Detroit.
Robert Hicks, chairman and managing partner of Taft, listed Jaffe’s attributes that were compatible with his firm, including having similar core strengths and familial cultures. However, he acknowledged the most attractive asset was the address.
The Detroit metropolitan area has 4.4 million residents and is the second-largest city in the Midwest, behind Chicago. Hicks pointed to Detroit’s rebound after filing for bankruptcy in 2013 — the largest municipal bankruptcy in American history — and its economic base supported by industry, health care and government contracts as presenting Taft with a whole new market to capture.
“They were just a really good fit,” Hicks said. “But we would not have merged with them if we didn’t want to go to Detroit. Detroit was the draw for us.”
The combination will take effect Dec. 31 and will grow Taft to 12 offices and about 800 attorneys. Jaffe will change his name to Taft.
Taft has been looking for a merging partner in the Detroit market for a while, according to Hicks. The firm had meetings, but some of the Michigan offices did not want to lose their independence while others did not fit with Taft’s practice areas, clients or culture.
Jaffe, who had recently gone through his own strategic planning process, reached out to Taft to discuss the potential for a merger. The two firms immediately clicked when that conversation started about 18 months ago, Hicks said.
The Michigan firm was founded in 1968 and currently has more than 120 attorneys spread between one office downtown and another in the suburb of Southfield. It is a full-service firm representing public and private clients across the Midwest and the United States.
“Jaffe is … very well-known, very sophisticated,” Hicks said. “They have a fairly iconic list of clients that they’ve served for many, many years. It’s a very loyal group. (They have) lots of University of Michigan law grads … so they’ve got great academic credentials, great loyalty to each other.”
Like many firms, Taft had a very strong 2021 financially. Hicks described it as the best year in the history of the law firm, and said he is anticipating revenue in 2022 will be “at least 10% higher than 2021 because of our growth.” The combined revenue of Taft and Jaffe will reach about $525 million this year.
Once Taft settles into the Detroit market, Hicks said the firm will mimic what it did in Minneapolis in 2020, when it acquired Briggs and Morgan. Namely, it plans to attract lateral talent with its “very transparent and market-based compensation system.”
“We tend to take market share from other firms mostly by hiring other lawyers,” Hicks said. “… (T)hey come and their clients come and you grow.”
Hicks, who will serve as managing partner through 2026, said he expects Taft will do one more merger in the next four years. In particular, he is looking at St. Louis, Pittsburgh and possibly Kansas City, Missouri.
“We will be looking at those markets,” Hicks said. “And we’ll be opportunistic if we find the right firm, but it’s got to be the right firm.”•