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The reception was held in May in the ballroom of the Willard Intercontinental Hotel, the grandest of Washington, D.C., establishments. A gaggle of ambassadors mingled with a brood of admirals; former Sen. Chuck Robb nodded to former Rep. Jack Kemp; everyone pretended not to be looking at Hollywood power broker Jack Valenti. The host was former Secretary of Defense William Cohen, who currently runs the Cohen Group, an international consulting outfit. The party was being thrown to welcome its newest member, Lord George Robertson, the former NATO secretary-general and British minister of defense. About an hour into the evening, Cohen got up to introduce the guest of honor, who received a warm welcome from both the dignitaries in the audience and his new strategic allies: lawyers from Piper Rudnick. It was a pretty heady crowd for the lawyers, most of whom have distinctly unglamorous backgrounds. Piper Rudnick is the product of the 1999 merger between Baltimore’s Piper & Marbury and Chicago’s Rudnick & Wolfe. Before the merger, Piper & Marbury was a denizen of the lower ranks of the Am Law 100, mostly on the strength of its corporate work. Rudnick & Wolfe and its powerful real estate practice never made the list. Both firms defined the terms middle market and regional. Neither made much of a splash on the national scene. But Piper Rudnick has reached a place on the national legal landscape that eluded its predecessors, and it’s poised to take another leap. Mingling among the luminaries at the gala for Lord Robertson was Peter Wayte, the head of private equity for DLA, an English firm with about 1,800 lawyers and a strong presence in Europe and Asia. The firms have been discussing a merger for the last year, and informed sources say they are close to an agreement in principle. The plan calls for former Senate Majority Leader George Mitchell, currently a partner at Piper Rudnick, to become nonexecutive chairman of the new firm. The current co-chairs of Piper, Francis “Frank” Burch Jr. and Lee Miller, would share CEO responsiblities with Nigel Knowles, the head of DLA. A MERGER OF EQUALS The potential Piper Rudnick-DLA merger is driven by ambition. In contrast, the merger between Piper & Marbury and Rudnick & Wolfe was born mostly out of fear. “In the mid-1990s, a lot of trends were converging that made ‘regional’ a dangerous place to be,” says Burch, who was the head of Piper & Marbury at the time. “I belong to something called the Managing Partners Roundtable, which meets a couple of times a year. As I listened to the others talk, I didn’t like what I was hearing about firms like us. Meanwhile, a lot of our clients were being acquired. When the merged company went looking for lawyers, we didn’t even cross their mind.” So Burch and a few fellow Piper partners started building up their frequent flyer miles. No specific objective, says Burch, just the sense that they had to do something. When two Chicago-based clients told Burch that the firm needed an office in that city to keep their business, Chicago became the focus. In the summer of 1998, headhunter Kay Hoppe arranged meetings between Burch and several managing partners in the city. One was a breakfast at the Four Seasons with Lee Miller of Rudnick & Wolfe. As breakfast stretched unexpectedly late into the morning, Burch and Miller found that they shared many of the same pressures, as well as a determination to do something about them. In October 1999, they joined forces. Law firm mergers are often presented as a joining of equals, usually as a sop to the egos of the lawyers in the lesser firm. But a merger of equals was Piper Rudnick’s goal from the start. Burch and Miller share the same title and get the same compensation. There is no national headquarters. The idea of blending “equals” was then, as it is now, anathema to management gurus. A single vision is key, runs the prevailing wisdom. For efficiency reasons, management should be centralized. All of which are usually harder when there are two chiefs. But five years down the road, the merger has to be considered a success. Between 1999 and 2003, profits per partner rose 46 percent, and revenue per lawyer grew 37 percent. In the same time, average profits per partner for the Am Law 100 as a whole increased 24 percent, and revenue per lawyer grew 18 percent. The firm has grown from about 670 lawyers in 1999 to nearly 1,000 today. How did Piper Rudnick do it? A BLUEPRINT FOR GROWTH Both Burch and Miller credit The Plan. (It always sounds capitalized when they talk about it.) The Plan was put together at the time of the merger. It called for growth. It called for strength in corporate, litigation, and real estate. It called for a presence in New York and California. Some pieces of The Plan have been an unqualified success. In New York, the firm has grown from about 45 lawyers at the time of the merger to more than 140. The growth was driven mostly by a strong litigation practice and the 2001 acquisition of lawyers from the disbanding Gordon Altman Weitzen Shalov & Wein. California, where neither predecessor firm had an office, has been more problematic. The firm intended to form a beachhead by merging with an established firm, but a deal with San Francisco’s McCutchen, Doyle, Brown & Enersen fell through in 2001. (McCutchen merged with Boston’s Bingham Dana instead.) The alternative — incremental growth — has been difficult, mostly because of problems attracting quality people. The firm has about 100 lawyers in California; about half the number Burch would like. The results aren’t in yet for Washington, D.C., the firm’s highest-profile move to date. The firm’s D.C. initiative was formed at two management committee meetings held in late 2001 and early 2002, soon after the Sept. 11 attacks and the Enron Corp.’s collapse. One result of those events, the firm leaders decided, would be an increased role for the federal government. New agencies would be established, new security systems would be procured, new corporate governance rules would be adopted. The firm decided to build up its Washington presence. Piper Rudnick’s first step was the alliance with the Cohen Group. Partner Theodore Segal helped form the group when Cohen left office in 2000, and was instrumental in arranging an alliance between the group and Chicago’s McDermott, Will & Emery. That relationship sputtered. Cohen says that to be effective, the alliance required entrepreneurial vision, the creativity to see beyond a traditional law partnership. McDermott’s Washington office had it, he says, but that vision wasn’t shared at the national level. (McDermott managing partner Harvey Freishtat declined to comment.) SHOOTING FOR THE STARS So the Cohen Group ended its alliance with McDermott and, in September 2002, started a new one with Piper Rudnick. (The firm paid a $2 million annual fee, guaranteed for at least two years, for the right to call itself the group’s “strategic partner.”) The next month, Piper Rudnick acquired Verner, Liipfert, Bernhard, McPherson and Hand and its roster of Washington insiders. “We had many suitors, but Piper Rudnick complemented rather than conflicted with our practice,” says Mitchell, who had headed Verner, Liipfert. Piper Rudnick has continued to add to its list of Washington heavies, recruiting former House Majority Leader Dick Armey (who isn’t a lawyer) and Hugh Price, the former head of the National Urban League, in the last year or so. The moves give the firm star power, but cachet doesn’t always translate into profitability, as shown by Verner, Liipfert’s experience in the late nineties. Despite names like Mitchell, Bob Dole, and Ann Richards, Verner’s lawyer count dropped from 200-plus to about 80, and profitability dropped too. (Dole and Richards never joined Piper Rudnick.) “The mistake Verner made was thinking they could build a full-service firm around their federal affairs practice,” says Burch. So is Piper Rudnick making money in the nation’s capital? Burch says the Verner, Liipfert acquisition exceeded projections from the start. The profitability of the firm’s alliance with the Cohen Group is hazier. He gives a couple of examples of the way it’s supposed to work: “We have a client who is planning to open a factory in Asia, and is considering three locations. Bill Cohen can take them by the hand, introduce them to the right government people, give them an idea of what it will take to succeed. That reflects well on us.” And he describes the flip side: “We were pursuing a relationship with [American International Group Inc.], but we couldn’t crack the inner sanctum. Cohen walked us through the front door.” The AIG account is now worth several million dollars per year, according to Miller. But questions about the bottom line produce a lot of hedging. Cohen says that it’s “a very good business relationship for them and for us,” and a Cohen Group spokesman says the alliance has produced results in the defense, insurance, and real estate industries — but neither will discuss numbers. GOING GLOBAL Like most Am Law 100 firms, Piper successfully navigated the economic downturn, which struck soon after the merger and continued throughout most of the firm’s existence. Chief Operating Officer Jeffrey Liss says diversification was key: The firm’s litigation and government affairs practices were growing at the same time its corporate work was slowing. In addition, real estate, one of the firm’s strengths, “held its own” better than other transactional areas. He admits, however, that luck played a part. (After all, the firm didn’t have much time to plan.) But Piper Rudnick was also prescient. Even before the technology crash, the firm cut the size of its summer associate class by half. Piper Rudnick’s growth continues unabated. The two Chicago companies that kick-started the merger are still clients and have referred other business. The firm opened a San Francisco office in December 2003, when it acquired 39-lawyer Steinhart & Falconer. And, in what appears to be a final tune up before the DLA merger is finalized, the firm acquired the 18-lawyer Paris office of D.C.’s Hogan & Hartson in June. DLA is affiliated with a French firm, but has no Paris office. “DLA looks a lot like Piper,” says Burch. “It’s a bit of an upstart — it’s not a patrician city of London firm.” The plan under discussion (it doesn’t yet sound capitalized) calls for strength in New York and London, and in finance and corporate work. On the surface, this deal would not be a straightforward merger of equals. DLA and Piper show similar profits per partner but radically different revenue per lawyer: Piper’s is roughly twice that of DLA’s. A merged Piper and DLA would be one of the world’s 10 largest firms and a living laboratory for the study of blending cultures. Difficult? Yes. But the last five years have shown that it’s unwise to discount a couple of Second City lawyers who are clear about what they want and hungry enough to keep striving. Paul Braverman is a senior reporter at The American Lawyer , where this article first appeared in the July issue.

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