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New York’s Dewey Ballantine and San Francisco’s Orrick, Herrington & Sutcliffe are discussing a possible merger, the leaders of both firms confirmed Monday. It remains unclear how far the discussions have advanced, but if a merger is completed, the combined firm would have more than 1,200 lawyers and hit nearly $1 billion in revenues, based on the most recent Am Law 100. “There is much that needs to be discussed so it is still premature to speculate on a potential outcome at this time,” said Morton Pierce, chairman of Dewey Ballantine‘s management and executive committees. “I will say that I am intrigued by the possibilities to create one of the largest and most dynamic firms in the marketplace.” “We think very highly of Dewey Ballantine,” said Ralph Baxter, Jr., Orrick’s chairman and CEO. “Like Orrick, it is an historic firm with many strengths. Talking with each other makes great sense. And that is what we are doing at this stage.” On the surface at least, the two firms are fairly closely matched. Both posted similar profits per partner last year: Orrick’s were at $1.24 million per equity partner, and Dewey’s hit $1.23 million. Revenue per lawyer was $765,000 at Orrick and $780,000 at Dewey. And both have deep ties to financial services clients. The two wouldn’t be tripping over each other, however. Dewey’s historic strength has been in representing investment banks in mergers and acquisitions. The firm ranked number one in volume and value of deals as counsel to investment advisers, according to The American Lawyer‘s Corporate Scorecard. Orrick’s corporate strength is in representing underwriters and issuers of municipal bonds, asset-backed securities, and mortgage-backed securities. It consistently ranks at the top of municipal finance league tables. However, Orrick has one of the largest non-equity partner classes among Am Law firms, and whether all of Dewey’s partners would become full partners in a combined firm is an open question. Both firms are also closely associated with their leaders: Pierce is a top mergers and acquisitions lawyers (earlier this year he represented The Walt Disney Company in its acquisition of Pixar Animation Studios Inc.); Baxter has headed Orrick since 1990 and has driven the firm’s aggressive growth strategy. Neither Pierce nor Baxter would offer specifics about their discussions, nor would they offer details about what a combined firm might be named or which firm had initiated discussions. If a deal between the two is consummated, the new firm would have a 500-lawyer office in New York, one of the largest for a merged firm in the city. Orrick has around 200 lawyers in New York, the firm’s largest single office; Dewey has 300. Dewey has long been associated with New York; its namesake, Thomas Dewey, was the former governor and two-time presidential candidate. Though it has offices on the West Coast, it would instantly gain a far bigger footprint. Orrick has more than 400 lawyers in California and the Pacific Northwest. The firm is one of the oldest in the Bay Area and handled the bond work for the Golden Gate Bridge. Law firm consultant Peter Zeughauser said such a deal would be a “watershed merger.” He said it would probably spur other merger discussions. Very few New York firms with the reputation and history of a Dewey have had serious merger discussions with a California firm. But Dewey’s bottom line hasn’t been growing as quickly as some of its New York competitors. The firm saw its ranking in profits per partner drop from number 22 to 32 among The Am Law 100. Revenue grew last year by a less-than-stellar 3 percent, from $380.5 million to $392.5 million. (The average annual increase for the Am Law 100 last year was 10.6 percent.) Orrick, on the other hand, has been in expansion overdrive. Revenue grew from $484 million to $554 million last year, a 14 percent jump, and the firm has been adding to its head count overseas. Since 2004 it has opened offices in Rome and Taipei and doubled the size of its office in London. It has also taken over three offices in China from the now-defunct Coudert Brothers. And at the beginning of the year, it acquired the Paris firm Rambaud Martel, which had nearly 100 lawyers. But not all of Orrick’s acquisition attempts have gone smoothly. In 2003 Orrick was in merger negotiations with Cooley Godward, but according to published reports, the two firms clashed over culture, and merger discussions were scrapped. (Cooley recently merged with New York’s Kronish Lieb Weiner & Hellman.)
Andrew Longstreth is a senior reporter for The American Lawyer , a sister ALM publication.

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