Orrick, Herrington & Sutcliffe must have achieved Ralph Baxter Jr.’s vision of being a world-class firm. Why else would any firm talk merger with Orrick, given the trail of heartbreak (and subsequent poaching) it has blazed over the last 10 years? Legal Pad exhumes the ghosts of non-mergers past.
“In New York firms in particular, the individual partners are used to a lot of autonomy and that’s a different model than Orrick � and it’s not just Orrick, it’s firms all over the country turning to more centralized management structures,” said Peter Zeughauser, a law firm consultant with the Zeughauser Group. “I do think that was an issue.”
Many observers criticized how the firms conducted merger discussions in the public eye, making statements and touting the “Dewey Orrick” firm since the story surfacedlast fall. The marketing departments went so far as to design a new logo � from the start it was noted that the green Orrick “O” would survive the merger.
“As in all deals, I prefer that it not be publicized until it’s signed and sealed,” said Pierce, a veteran M&A lawyer. “It was out there publicly because it leaked, not because of our designs.”
Pierce worked closely with Aiello, who left for Weil, Gotshal & Manges, and Bodner, who left for Covington & Burling, in Dewey’s M&A department and said he wished them the best. The firm also lost Benjamin Hoch and Dianne Coffino, who joined Covington’s financial restructuring and insolvency practice. White & Case snared three partners, including bankruptcy partners Alan Gover, who headed Dewey’s bankruptcy group, and project finance partners Earle O’Donnell and Donna Attanasio.
Others who have left include tax partner Thomas Giegerich, who joined McDermott, Will & Emery, and lending lawyer Arthur Hayes III, who joined Sonnenschein Nath & Rosenthal.
“We may have lost a few people because of the discussions,” says Dewey executive committee member Jeffrey Kessler, “but I don’t think it was a mistake [to engage in merger talks with Orrick]. It was something worth exploring. At the end of the day, I think we will both be stronger firms.”
Pierce said he had no regrets either. “I think it’s been positive, it’s been an education � it’s the first time we ever discussed a merger.”
Pierce said he would be open to a merger down the road, although the firm won’t be actively courting other firms.
Consultants say a merger between two firms like Orrick, which has about 1,000 lawyers, and Dewey, with around 500, brings some difficulties.
“Mergers are complicated transactions, especially for large firms,” said Brad Hildebrandt of Hildebrandt International, who advised Orrick in the deal. “There were a lot of issues, but no one issue was the deal breaker.”
The combined firm would have had 1,500 lawyers in 21 offices around the world, including 12 outside the U.S., and revenues of more than $1 billion, which would have placed it in the top 10 on the Am Law 100.
Orrick’s revenue grew 20 percent to $666 million in 2006, and profits per partner were up 15 percent to $1.43 million, according to figures released by Orrick on Thursday.
The American Lawyer magazine’s Brenda Sandburg contributed to this report.