Cadwalader Talks Merger With Alston & Bird, Hires Davis Polk (2)

Cadwalader Wickersham & Taft is discussing a merger with Alston & Bird and has hired Davis Polk & Wardwell to advise on a possible deal.

Alston & Bird is among firms Cadwalader has approached to discuss a merger, according to three people familiar with the matter who requested anonymity because the talks are private. Cadwalader engaged Davis Polk to work on the legal aspects of a tie-up, according to two of the people.

Cadwalader ramped up merger interest during a year of precipitous losses. Alston & Bird would gain the name-brand recognition of Wall Street’s oldest law firm and access to a well-regarded team of bank and fund finance lawyers by combining with Cadwalader.

Cadwalader, reached for comment, said it has been approached by firms about a merger but didn’t address its engagement of Davis Polk or talks with Alston & Bird.

“As every top firm does, we regularly evaluate our strategy to further capitalize on our market-leading strengths for our clients,” the firm said in the statement. “We have been approached by many top-tier firms for years, and that continues.”

Davis Polk and Alston & Bird didn’t return requests for comment.

Bulking Up

A tie-up between the two firms would allow them to share strengths while Alston & Bird stabilizes Cadwalader’s more volatile revenue stream, said West Coast-based legal recruiter Nick Goseland, founder of Edgewater Search Group.

“They are both strong in structured finance and have strong southeast practices—it sounds like they are building strength on strength,” Goseland said. “Alston & Bird can add on ancillary practices like patent litigation and a variety of other things that Cadwalader has never been known for.”

A tie-up with Alston & Bird could prove to be a lifeline for Cadwalader, which has lost nearly one-fifth of its partners this year. The nature of the exits—senior partners in core practice areas such as finance and capital markets—are most damaging to the 233-year-old firm because the business those lawyers brought in is difficult to replace, analysts have said.

A combination of the two firms would result in a new operation with nearly $2 billion in revenue and more than 1,300 lawyers, based on American Lawyer data.

Alston & Bird, itself more than 100 years old, has grown beyond its home state of Georgia through office openings in Washington DC and Dallas, and in mergers with firms in New York, Los Angeles, and Charlotte. It is roughly twice the size of Cadwalader in terms of 2024 revenue and number of lawyers, according to American Lawyer data.

Davis Polk, meanwhile, has played a prominent role as a dealmaker for at least one other large law firm tie-up. The firm advised Shearman & Sterling when it merged with Allen & Overy, Davis Polk said in a 2023 statement. Simpson Thacher & Bartlett aided Allen & Overy, according to a Simpson press release from the same time.

‘Actively Hiring’

In its statement, Cadwalader said its client relationships are healthy. During the first three quarters of the year, the firm added 13% more new client relationships and opened 20% more new matters compared with the same time in 2024, the statement said.

“The firm has added more than 75 new attorneys this year and is actively hiring to keep up with ongoing client demand,” according to Cadwalader.

Cadwalader, if it engages in a deal, would add to a busy period of tie-ups. Nearly 50 law firm mergers have been executed in the first three quarters of this year, increasing 10% over the same time period of 2024, according to a report by consultancy Fairfax Associates. Schulte Roth & Zabel, for instance, finalized its combination with McDermott Will & Emery in August.

Several more law firm combinations are slated for the coming months. Cozen O’Connor, a Philadelphia-headquartered firm, said it will acquire Minneapolis-based firm Moss & Barnett.

“Market expansion, economies of scale, and profitability increases—you can do that with the larger combinations,” said Howard Cohl, a Major Lindsey & Africa partner who advises firms on mergers.