Piper weighs major merger

Deal would propel city's No. 1 law firm into top 5 in U.S.

May 01, 2001|By M. William Salganik | M. William Salganik,SUN STAFF

Piper Marbury Rudnick & Wolfe LLP, the largest law firm in Baltimore, is in serious merger talks with a California firm, officials of both firms confirmed yesterday.

If completed, the merger with McCutchen, Doyle, Brown & Enersen LLP of San Francisco would create a national firm with about 1,150 lawyers and annual revenue of $600 million. It would vault Piper, the 33rd-largest law firm in the country in the most recent ranking by American Lawyer magazine, into the top five.

That would represent Piper's second big jump in two years. In 1999, the old-line Maryland firm Piper & Marbury, then the 75th-largest in the country, merged with Rudnick & Wolfe of Chicago. Piper's Francis B. Burch Jr. and Rudnick's Lee I. Miller became co-chairmen of the merged firm.

"When Piper and Rudnick merged, we agreed upon a strategic plan, and the California market was a part of that plan," Miller said yesterday. "This gives us a national footprint."

Abraham Dash, a professor at the University of Maryland School of Law, said the Piper-McCutchen merger talks represent "a trend toward making law firms more nationalized. More and more law firms are finding they've got to start practicing all over the country so they can represent big corporate clients wherever they want."

Michael J. Plishner, managing partner of the McCutchen firm, said yesterday, "Increasingly, the litigation and deal work we're doing is all over the country. Increasingly, the client would say, `Gee, the case is in Delaware; do you have an office there?' "

McCutchen, with about 300 lawyers and nearly $200 million in annual revenue, has offices only in California - San Francisco, Palo Alto and Los Angeles.

Piper, has about 825 lawyers, including 200 in Baltimore. In addition to its Baltimore and Chicago home offices, it has lawyers in Washington, New York, Tampa, Fla., Philadelphia, Dallas and Reston, Va.

If the merger is completed, Piper-Rudnick's recently hired five-lawyer group in Los Angeles would move into McCutchen's 60-lawyer office there.

Barry F. Rosen, chairman and chief executive officer of Gordon, Feinblatt, an 80-lawyer Baltimore firm, said large regional law practices are looking to become larger and national in scope because, "There is some cream business - the very highest-price business from Fortune 500 companies that want to select one of the largest firms."

Since the Piper-Rudnick merger, the combined firm has been able to win several large, complex pieces of business, such as development of an online auction site for General Motors, said Burch. Separately, it is likely that neither firm would have been "big enough, deep enough and visible enough on the radar screen [to win the business]," he said.

Similarly, he said, the combined firm threw 100 lawyers into the proposed MCI-Sprint merger, which ultimately failed to materialize. While Piper had worked for MCI previously, "there's no way we could have done that" with the staff of the old firm.

Also, principals of Piper and McCutchen said, a merger would provide an opportunity to work for clients of the other firm. "We've got a lot of telecommunications clients who would like Piper's regulatory expertise," Plishner said.

Burch said the Piper-Rudnick merger had produced similar opportunities to sell more services to existing clients. For example, he said, Piper did corporate work for the Rouse Co. of Columbia, and added substantial real estate work - an area of strength for the Rudnick firm - after the merger.

Although preliminary talks between Piper and McCutchen have gone well, "there's some work to be done yet," Burch said. "It'll happen, if it does, within six months, and we're very optimistic that it will happen."

The two firms recently agreed, after each had talked with a number of other potential partners, to make their talks exclusive. "This is the one we want to do, if we can put the deal together," Plishner said.

Burch said the two firms had been brought together by Bradford W. Hildebrandt, founder of Hildebrandt International, a management consulting firm for law practices.

He said there were a number of key issues to be worked out, including management structure.

As in the Piper-Rudnick merger, he said no headquarters office would be designated. Unlike some business combinations, law firm mergers generally don't produce closings or layoffs, and none are expected in this case, he said.

As for a potential next step, Burch said, "If this comes off, there's no domestic market where we feel we'd have to be to finish the footprint."

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