Troutman Pepper and Locke Lord are grappling with significant client conflict challenges as they continue merger discussions. According to multiple individuals familiar with the situation, several Locke Lord affordable housing and energy lawyers may find themselves unable to represent longstanding clients should the merger proceed. This has already led to the departure of at least three lawyers from Locke Lord, highlighting the delicate nature of blending two large firms with disparate client bases.
The firms, who declined to comment on the client conflicts, noted that merger talks are still ongoing. The potential merger, which was first confirmed in April, aims to create a firm with over 1,600 lawyers and more than $1.5 billion in revenue, placing it among the top 30 largest law firms.
Troutman Pepper has recently represented financial giants like JP Morgan Chase, Wells Fargo, and Bank of America, as disclosed in their June 20 bankruptcy case application. These banks have financed numerous projects involving Locke Lord clients, exemplifying the complex web of interests at stake. For instance, Locke Lord’s work with Tampa Electric, involving JP Morgan and Bank of America financing, underlines the potential overlap and ensuing conflicts.
One prominent conflict involves Ameren Illinois, a Troutman Pepper client, which opposed a request Locke Lord filed with the Federal Energy Regulatory Commission for guidance on wind and solar equipment in 2021 (document here).
Despite assurances from Locke Lord that the merger would generate new business to offset any lost accounts, some lawyers remain unsatisfied, citing the intricate nature of reconciling client interests. Legal industry consultant Kristin Stark noted that the mergers in a consolidated market pose fewer options due to the myriad client conflicts, making this hurdle unsurprising. She emphasized the necessity of rigorous conflict checks to garner partner support for any merger.
The firms have reiterated their commitment to delivering exceptional legal services, indicating that no further comments will be made until partnership votes occur. Troutman Pepper, formed by a 2020 merger, and Locke Lord, created by mergers in 2007 and 2015, both bring significant revenue and lawyer headcounts to the table, underscoring the potential scale of this merger.