Piper Rudnick to merge with smaller, high-tech law firm in Calif.

Legal practice to become one of top 10 in country

October 19, 2004|By Bill Atkinson | Bill Atkinson,SUN STAFF

Piper Rudnick LLP, one of Maryland's biggest law firms, said yesterday that it will merge with a California firm that specializes in technology law, creating one of the top 10 legal practices in the country.

Piper's merger with Gray Cary Ware Freidenrich LLP, which is expected to be completed in January, will create a firm with 1,380 lawyers, 20 offices and $800 million in projected 2004 revenue. No offices will close and the firm will be called Piper Rudnick/Gray Cary for a period until the name is shortened.

Gray Cary currently has about 380 lawyers and Piper Rudnick has about 1,000.

"It really is a great, great fit for us and a great fit for them," said Francis B. Burch Jr., co-chairman of Piper Rudnick, which has 171 lawyers in Baltimore. "It will give us a meaningful presence in every market that matters in California."

J. Terence O'Malley, Gray Cary's chairman and chief executive, said the deal gives his firm more resources, a nationwide presence and a partner that has similar views about the direction of the legal profession. Both firms, he said, are committed to building a "world-class global law firm."

"We believe there are going to be a small number of players. When the dust settles ... we want to be one of them," O'Malley said.

Piper Rudnick, itself, is the product of a 1999 merger between Piper & Marbury of Baltimore, which was formed in the mid-19th century, and Rudnick & Wolfe of Chicago, which began in 1936.

UK merger weighed

Since the merger, Piper Rudnick has aggressively expanded by opening offices and through mergers. Currently, it is negotiating to merge with DLA, the seventh-largest law firm in the United Kingdom, with 1,800 lawyers throughout Europe and Asia.

Burch said the Gray Cary merger "hits three big targets for us with one arrow."

One is California, a huge market that Piper Rudnick has eyed for the last five or six years, Burch said. The merger would make Piper Rudnick about the 10th-largest law firm in the state. Most of Gray Cary's attorneys are in San Diego and Silicon Valley.

The transaction also doubles the size of Piper Rudnick's corporate practice, particularly in technology and securities, and gives it access to Gray Cary's blue-chip list of technology clients that include Intel Corp., Hewlett-Packard Co. and Qualcomm Inc.

Complex cases

It also builds Piper Rudnick's national litigation practice, which will become one of the nation's largest at trying complex litigation, such as commercial and patent disputes.

The move also enables Piper Rudnick to better protect its client base from competitors. For example, Ryland Group Inc., a Piper Rudnick client, moved from Columbia to California.

"It would not be a big client if we had not followed it to California," Burch said. "If you are not there taking care of their needs, somebody else will."

Edward Poll, principal at LawBiz Management Co., a consultant in Venice, Calif., said law firms are merging and getting larger to keep clients. They are also following them around the globe so they don't lose them to competing firms.

"It [the merger] certainly makes a lot of sense," Poll said. "It is consistent with the trend in the industry to try and grow."

Gray Cary has "good lawyers, they have a good reputation," Poll said. "This is a beautiful opportunity for Piper to offer that [technology] skill to its corporate clients which maybe it didn't have before."

Clash of cultures

Every merger carries risk and one of them is a clash of cultures, Poll said.

"That is one of the primary reasons for failed mergers," he said. "The risk is that some of the better lawyers on their side may not like the merger and may split off and create a boutique law firm and take some of their better clients with them."

Burch doesn't think that will happen. "We are optimistic that they will see this as a very compelling opportunity," he said. "People like to play offense, not defense. You have to create a more compelling and more attractive opportunity than the competition."

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