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Washingon, D.C.’s Shaw Pittman and San Francisco-based Pillsbury Winthrop announced Wednesday that they intend to merge, a union that would create a 900-lawyer giant with a national reach and global ambitions. The two firms have signed a letter of intent to merge and expect the deal to be finalized by April 4. The pact still needs to be ratified by the firms’ partners. If the partners sign off, the newly minted Pillsbury Winthrop Shaw Pittman would catapult into the top-five-grossing firms in the D.C. region and become one of the top 20 in the nation. However, many details still remain. One of the stickiest issues: How many attorneys will exit before the deal is closed, primarily because of client conflicts. But on Wednesday, Pillsbury chair Mary Cranston, who was in D.C. to announce the deal, and Shaw Pittman managing partner Stephen Huttler accentuated the positive as they discussed the deal. They emphasized that the new firm would have offices in such strategic markets as New York, San Francisco, and D.C. and would be poised to extend its reach in Europe and Asia. Cranston said the move is designed to fill in Pillsbury’s last major geographic gap in the United States � Washington � and helps position the firm as one of the “leading global firms.” “Neither Stephen or I believe this will be the ultimate endgame,” Cranston said. The union gives Pillsbury � the product of a 2001 merger between San Francisco’s Pillsbury, Madison & Sutro and New York’s Winthrop, Stimson, Putnam & Roberts � more than 350 D.C.-based lawyers. And while the deal gives Shaw Pittman some stake in the upper echelons of management, it is designed to make Pillsbury truly global in scope. By merging with Shaw Pittman � known for its top-notch outsourcing practice � Pillsbury will carve out another niche practice for itself, along with capital markets, intellectual property, technology, and litigation. “Growth itself is very expensive,” said Cranston, who would remain chair of the new firm. Huttler and Pillsbury’s David Snyder would be vice chairs. Pillsbury’s Marina Park would remain firmwide managing partner. Analysts said that the two firms stand to gain with their complementary practices in banking, real estate, and technology. The firms are still debating client conflicts, and the outcome could lead to the loss of more than 100 lawyers from the more than 1,000 now at the two firms. Other attorneys at Shaw Pittman may opt for a smaller operation and leave the firm, said Colin Beebe, law firm recruiter at North Berman & Beebe. How to reconcile financial differences could also prove a challenge. Shaw Pittman’s revenue has been stagnant for the past few years, hovering around $192 million, and Pillsbury posted only a 2 percent increase in revenue, to $432 million, according to The Recorder, Legal Times‘ San Francisco affiliate. And the difference in profits per partner � at $545,000, Shaw Pittman’s are about $200,000 lower than Pillsbury’s � could squeeze the firm in the D.C. market. It is also unclear how changes in compensation will shake out. Although both firms have tiered partnerships, neither is exactly like the other, and more of Shaw Pittman’s partners will shift to income-based compensation, Huttler said. For his part, Huttler believes the increased capacity of the two firms will help increase their revenues “immediately.” Already, the firms are working through the logistics of integrating their computers systems and moving Pillsbury’s 27-partner Washington office into Shaw Pittman’s newly renovated space on N Street, N.W. “We want to really hit the ground running,” Huttler said.

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