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Law firm expands lobbying services via mergers

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Harrisburg-based McNees Wallace & Nurick LLC continues to add to its roster of professionals as mergers and acquisitions permeate the legal industry.

Many large law firms, facing stagnant demand for services, have been turning to mergers to grow their geographic reach and their range of services, according to legal consultants.

Consulting firm Altman Weil, which tracks law-firm mergers, reported 70 law-firm combinations for the year as of August, a record pace. About half of the mergers this year have involved bigger firms acquiring smaller shops.

But at McNees, the midstate’s largest law firm, growth is not just coming from adding other law firms. The Dauphin County firm has been growing organically into new areas like esports law, a mix of multiple disciplines including labor and employment, contracts and intellectual property.

And more recently, the 130-attorney firm has been snapping up lobbying firms in Harrisburg in an effort to bring its legal services to more businesses.

Last week, McNees said it bought The Winter Group, a firm led by former Democratic lieutenant governor Mark Singel. McNees added three professionals under the deal.

Six months ago, the firm acquired Capital Associates Inc., adding five lobbyists.

“This is nothing new. Law firms have done this for years,” said John Olmstead, a legal management consultant with St. Louis-based Olmstead & Associates.

Olmstead, who helps law firms buy and sell practices, said retirement of key principals is driving activity. But law firms also are competing with accounting firms that are beefing up their tax departments with attorneys and opening new offices, he said.

Olmstead said it makes sense for law firms to enter nontraditional areas like lobbying, public relations and investment advice. He also is seeing more firms dive into private investigations and insurance services, as well as IT consulting.

Human resources consulting also is a growing area, he said, as it can build on a firm’s labor and employment practice. Clients may need someone to draft new employee handbooks or conduct training sessions.

The goal is to serve clients in more than one way, he said. It ties firms more closely to their clients and builds brand loyalty.

But, Olmstead added: “Most deals aren’t part of a strategic plan. Opportunities just present themselves.”

Getting started

David Kleppinger, chairman of McNees, said his firm’s 2014 acquisition of Community Networking Resources got the ball rolling on expansion into lobbying. However, he added that the firm is not looking to go on a buying spree, even after its two lobbying-firm acquisitions this year.

“We want to make sure we integrate these two first before we do anything else,” he said.

The two acquisitions have propelled the firm’s subsidiaries to about 20 professionals providing government relations and nonprofit services such as fundraising, he said.

Neither lobbying firm bought by McNees had grassroots lobbying, which McNees offers through Community Networking Resources. The law firm also operates Mid-Atlantic Strategic Solutions and Capital Associates for government affairs, as well as Helix Strategies LLC. Helix works with nonprofits, community-based organizations and social enterprises to raise funds and develop their leaders and programs.

The Winter Group, which is now operating as McNees-Winter Group LLC, will be a new subsidiary.

In addition to serving health care and energy clients, Winter Group covers retail, hospitality, gaming, manufacturing, technology and philanthropy. And it was headed by a well-known Democrat.

“We’re at a point where we wanted to provide bipartisan depth,” Kleppinger said. “This acquisition does that with Mark’s ties in the Democratic party.”

Republicans control the General Assembly in Harrisburg, but that may change at some point. McNees is being proactive, Kleppinger said. “It’s almost necessary to have a bipartisan approach. The more people you have that are quality lobbyists, the more relationships they have on either side of the aisle.”

Kleppinger said the recent moves also could help McNees market its legal services to businesses and associations in areas such as health care and energy. The firm also has been adding seminar events on topics like esports and food and beverage.

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Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin and Cumberland counties. Have a tip or question for him? Email him at jscott@cpbj.com. Follow him on Twitter, @JScottJournal.

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