Parmele Law buys out former partners

Time, it seems, has healed the wounds of an old partnership split.

Parmele Law Firm PC, a Springfield-based Social Security Disability Insurance practice with a regional footprint, has acquired bankruptcy specialty firm Reynolds, Gold & Grosser PC – doing business as RGG Law – for undisclosed terms.

The buyout rejoins Parmele Law Firm founder and President Dan Parmele and RGG Law partners Ken Reynolds and Jon Gold. Partner Robert Grosser left the firm late last year and is among a half-dozen staff members opting not to join Parmele Law.

In the deal that closed March 1, RGG Law PC was established as a subsidiary of Parmele Law, 1505 E. Bradford Parkway, and will continue to practice in bankruptcy and civil litigation. The bankruptcy services will remain at RGG Law’s office, 1240 E. Independence St., just east of Cox South. Parmele Law now operates 20 offices with 13 attorneys and over 109 staff members.

Long history
RGG Law’s roots date back to 1995 when Parmele & Gold PC was founded. A year later, Reynolds joined the team and the firm’s name changed to Reynolds, Parmele & Gold PC. In 2001, the partners had different ideas about how to grow the company and went their separate ways. Parmele launched Parmele Law Firm and Grosser became a named partner for the firm that began to market itself as RGG Law.

“It was real scary at the time to jump out on my own. It was kind of like leaving the Social Security Administration to start a firm,” Parmele said, referring to his five-year stint as an SSA attorney before joining forces with Gold. “You don’t know what the future holds, but initially, it seemed like the best decision I ever made.”

At the time, benefits-seeking baby boomers were poised to change the landscape for the Social Security and disability practice, he said. Parmele wanted to grow, and he said the partners were more conservative.

“We had opened seven offices at my old firm, and I was ready to keep going. I loved opening new offices,” Parmele said. “Jon and Ken are both bankruptcy attorneys, and they looked at things a bit differently, I guess. Over time, I’ve come to understand a little bit of caution is probably a good thing.”

After starting with three offices, Parmele spread out to underserved areas across Missouri, Kansas and Illinois. Prior to the acquisition of RGG Law, Parmele Law operated 18 offices, generating revenue last year of around $8 million.

Bankruptcy demand
But the winds are shifting.  Since 2008, Parmele estimated monthly Social Security hearings for the firm have dropped to around 300 from nearly 500.

Now, he said, diversifying with a focus on bankruptcy is appealing.  

The onset of a tough lending market following the 2008-09 economic downturn ushered in leaner times for RGG Law’s bankruptcy practice.

“When the economy took a dive with the Great Recession, believe it or not, that affected bankruptcies. You’d think there’d be more bankruptcies filed, but what it really did was cause people to spend less,” Reynolds said. “As a result, the number of bankruptcies has fallen.”

Challenges already had been growing with bankruptcy reforms in 2005. In the Western District of Missouri, total bankruptcies hit a peak in 2005 of 11,998 before falling sharply to 3,802 in 2006. The numbers crept up to a recent high of 7,058 in 2010 before falling again four years in a row. In 2014, the most recent numbers available, there were 4,598 bankruptcies filed in Western District courts.

“As credit card debt starts to increase, we anticipate things will start to move in the other direction with more bankruptcies being filed,” Reynolds said.

According to the New York Federal Reserve Bank, total household debt in fourth-quarter 2015 was $12.12 trillion, which is up nearly 2.5 percent from the same quarter in 2014. But it’s still better than the $12.68 trillion mark in third-quarter 2008.

Back together
Prior to the acquisition, RGG Law had three offices – one each in Springfield, Oklahoma City and Tulsa, Okla. But a death last year of a former judge who ran the Oklahoma City office left that branch in limbo. As part of the March buyout, Parmele Law added three attorneys from two offices.

In addition to Reynolds and Gold, Sam Coring joined the Parmele team. Attorney Grosser, however, signed on with Rooney, McBride & Smith LLC as an of-counsel attorney. He’s also looking to start an online travel company with Chance Potts of Employee Benefits Design. Grosser left the firm in early October but remained a principal until it sold.

“I left primarily for some health issues. I needed to take a different focus in my life, reduce some of the stress and anxiety,” he said. “I wanted to practice law in a different way.”

Grosser said he started with the firm in 1997 and played a limited role in the deal.

“Dan created a great law firm with Parmele Law Firm, and to be able to reduce some of the overhead and competition – a lot of it just makes sense,” Grosser said. “Financially, it is harder to make a living in the Social Security sector unless you’re maintaining a large volume with your practice. I think the economics of it made sense for them to all come back together.”

Parmele said the company’s client list is around 10,000. RGG Law’s revenue last year was less than 20 percent of Parmele Law, and Parmele predicts a 15 percent increase in annual revenue is attainable with the merged operations.

RGG Law partners had engaged in merger talks a couple of times with Parmele, according to Reynolds, and even came close to inking a deal about 18 months ago but stumbled on a final price.

Reynolds said he couldn’t have imagined he and Gold would rejoin Parmele when the disability attorney left in 2001.

“At times, the relationship may have been strained, but I always considered Dan a friend,” Reynolds said.

“Everyone got over it.”