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Partners at Pittsburgh-based K&L Gates and Dallas-based Hughes & Luce approved a merger of the two firms yesterday.

The firms announced in July they were in merger discussions and will close the deal on Jan. 1.

With the addition, K&L Gates will pick up another 150 attorneys across the Dallas, Austin and Fort Worth markets. At the start of the new year, the firm will have more than 1,500 attorneys in 23 offices across the United States, Europe and Asia.

K&L Gates already had a Dallas office with about 30 attorneys, but Chairman and Global Managing Partner Peter J. Kalis said the firm wanted critical mass across Texas. The firm entered the Dallas market through its January 2001 merger with Wolin Ridley & Miller.

Hughes & Luce has been in existence for nearly 35 years and focuses its practice in the areas of complex litigation, mergers and acquisitions, intellectual property, tax, public policy, real estate, and outsourcing and technology transactions.

In a statement announcing the merger, K&L Gates touted itself as one of the few credible firms with a true three-continent platform. The combination, the firm said, would help connect Texas-based clients to the global economy and better represent Texas-based corporations in the state and abroad.

K&L Gates’ strategic plan calls for it to be in areas where there are significant concentrations of decision makers who control legal spending on important, sophisticated matters, he said.

Kalis said Texas fits into the firm’s international platform for several reasons. It has an economic output akin to that of Canada and 10 percent of the Fortune 1000 has a presence in the state.

Texas is a technological center with research universities and investment funds that have a global reach, he said.

“And it has a lot of people who unfairly sue the foregoing,” he said.

That, Kalis said, is the formula for a great legal market.

Texas has been on the hot list for firms across the country looking to expand geographically and Pennsylvania firms have been no exception.

Aside from Morgan Lewis & Bockius, Cozen O’Connor, Duane Morris and Dechert, however, some of the largest Pennsylvania-based firms have yet to make it into the Lone Star State.

Kalis said it’s a very tough market to enter, with few firms there that are well suited for acquisition.

“A couple of Pennsylvania firms walked into the batter’s box, took three whiffs and walked back into the dugout,” Kalis said, although he wouldn’t mention names.

K&L Gates was fortunate, he said, to find a firm like Hughes & Luce, which he said was “perfectly proportioned to be a highly productive portal.”

Kalis said the merger was approved unanimously by the K&L Gates partnership and he hadn’t asked about the percentage of the Hughes & Luce partnership that voted “yes” to the deal.

As far as he knows, Kalis said the entire firm would be joining K&L Gates. He said he doesn’t know of any group that has conflicts or is planning to depart. When asked whether there were any client conflicts that needed to be worked out before the deal could go through, Kalis said none that he wanted to talk about for publication.

Hughes & Luce clients, according to The Legal‘s sister publication Texas Lawyer‘s list of the 100 largest firms in Texas, include San Antonio’s AT&T Inc., Dell Inc., Electronic Data Systems Corp., Wells Fargo Foothill Inc. of Los Angeles and Wal-Mart Stores Inc. of Bentonville, Ark.

In 2006, Hughes & Luce’s profits per equity partner (PPP) averaged $574,000 and revenue per lawyer (RPL) averaged $527,000, according to Texas Lawyer‘s annual “Report on Firm Finance.”

The financials were higher at Kirkpatrick & Lockhart Nicholson Graham in 2006, according to the AmLaw 100 report published by The American Lawyer. PPP averaged $780,000 and RPL averaged $605,000. At Preston Gates & Ellis – the firm that combined with Kirkpartrick & Lockhart to form K&L Gates in January 2007 – PPP averaged $500,000 and RPL came in at $535,000 for 2006, according to the AmLaw 200 report.

Dallas-based legal recruiter Diane Caldwell had said in July that Hughes & Luce was known as one of the major firms in the city. She said then that the firm had talked with several firms in the area about potential mergers.

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