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New York-based Dewey Ballantine and San Francisco-based Orrick, Herrington & Sutcliffe confirmed last week that they are engaged in merger talks. If the deal goes through, it will represent the largest domestic legal union since Washington’s Wilmer, Cutler & Pickering merged with Boston’s Hale & Dorr in 2004. If no lawyers or practice groups leave either firm as a result of the merger, the combined firm would be a more than 1,200-lawyer behemoth with nearly $950 million in revenue, based on the data the firms reported for the most recent American Lawyer revenue survey. But Ralph Baxter, Orrick’s chief executive officer, cautions that the discussions are still preliminary. “No decision has been reached,” he says. If the talks are successful, the new firm will boast more than 500 lawyers in New York and a broad national and international presence, legal observers say. Although the merger represents great potential, one D.C.-based source says he expects the firms to struggle with financial and control issues. Strong leaders head both firms, he notes. Baxter has been at Orrick’s helm for 16 years, during which he has overseen the firm’s transformation from a primarily California-based domestic firm to one with a significant international presence. Dewey is led by top M&A lawyer Morton Pierce, who is chairman of the firm’s management and executive committees. The firms reported similar profitability in 2005, with Orrick hitting $1.24 million in profits per partner and Dewey coming in at $1.23 million. But although Orrick’s profitability has grown, Dewey’s has slipped slightly. Orrick’s 2005 numbers marked a 13.8 percent increase in profits per partner over the previous year’s results, whereas Dewey’s profits declined 0.4 percent over the same period. Both firms have strong corporate practices but fairly discrete areas of expertise. Dewey’s strength lies in its representation of investment banks in mergers and acquisitions, while Orrick is well known for its debt-financing work. What the merger would mean for the firms’ Washington offices remains to be seen. Several D.C.-based recruiters say they don’t see a lot of immediate compatibility between the firms’ D.C. offices. “This is all about New York,” says one observer. “Everyone wants to be a monster in New York.” The firms’ D.C. offices have distinct practices with little overlap. Orrick’s 83-lawyer D.C. office has prominent project-finance and structured-finance practices, as well as litigation, white-collar, tax, and strategic- and crisis-communications groups. Dewey’s 52-lawyer D.C. office is perhaps best known for its international trade and energy practices. It also has tax and intellectual property groups. “If we were to merge, it would strengthen both offices by virtue of putting our resources together,” Baxter says of the impact the combination would have on the firms’ D.C. offices. The merger would also create opportunities as a result of the greater market position the merged firm would have in the District, he adds. Moreover, Orrick’s project-finance practice in D.C. and Dewey’s energy practice could be complementary, Baxter notes. “We know each other well in energy and project finance.” If they do merge, the firms will have to consider how to consolidate their office space in Washington, as both firms have recently signed new leases. Dewey is set to move from 1775 Pennsylvania Ave. N.W. to 975 F St. N.W., and Orrick recently inked a deal for about 140,000 square feet of space on 15th Street between L and M streets. Alexia Garamfalvi can be contacted at [email protected]

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