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Like a teen-ager fraught with anticipation over a prom date offer, Mary Cranston spent a tense week in March waiting for one man’s phone call, all the while “staving off the other suitors because you’re waiting for the right one to call.” When it rang, and when she and the leadership of her firm, San Francisco’s Pillsbury Madison & Sutro, accepted a merger proposal from New York’s Winthrop, Stimson, Putnam & Roberts, she got precisely what she had wanted. When she took the helm at Pillsbury two years ago, she had laid out her priorities for the firm’s strategic plan: access to New York and Asian financial markets and a critical mass of lawyers that would bring her firm over the 800-lawyer mark. “Each of our practice areas was strong and on the map, and putting them together makes us among the largest of the U.S. blue-chip firms,” said Cranston, who had been determined to find a New York mate. Although management at both firms says the merger has all but been completed, partners at both firms will cast their official votes today and Friday. But will the merger make the two firms better, or merely bigger? Pillsbury hopes the merger will be another victory for Cranston and managing partner Marina Park, who have been working to restore the old-line firm to its former glory and even propel it further into a position of global leadership. Or, it could become a behemoth of a management project with little impact on the firm’s bottom line and its effort to grow into a top-tier high-tech player. Chairmen and managing partners at competing San Francisco Bay Area firms were loath to discuss the merger on the record, although some said generally that law firm mergers often signal nothing more than two firms clinging to each another for survival. What is clear is that the newly merged firm will have more than 800 lawyers in 17 offices, including four offices in Asia and one in Sidney, Australia. It will also have the 11-lawyer London office that Winthrop opened 30 years ago and a promise from Cranston to immediately begin the hunt for a merger with a London firm. From Winthrop it will inherit well-regarded banking, corporate finance, leasing and aviation practices. From Pillsbury, it will gain traditional full-service practices plus growing intellectual property and technology groups. Prominent clients of the merger include Pillsbury’s Bank of America, Chevron and SBC Communications Inc.; and Winthrop’s Deutchbank and Bank of New York. For now, both firms remain somewhat dogged with reputations for being old-line firms with litigation prowess but shortcomings on the corporate and high-tech side. The legal community is watching to see if the merger — described as one of the largest if not the largest law firm merger in U.S. history — will yield the global powerhouse the newlyweds want to be. A STRONG ATTRACTION The route to the firms’ introduction resembled a romantic comedy. Both were slow to realize that the firm of their dreams was also searching for a mate. But in January, the compatibility of the two was realized by Austin-based consultant Bill Flannery. He had been hired by both firms to train lawyers to break down practice group barriers and work in teams to solicit additional work from clients. He knew precisely what each firm was looking for. “I called Mary and said, ‘I believe I have someone you should talk to, someone from a firm as close to yours as being separated at birth as two law firms could be,’ ” Flannery recalls. Within days, Cranston and Park met Winthrop’s chairman and managing partner for breakfast at a Manhattan hotel, and over a bowl of bran flakes Cranston was floored by how like-minded in management philosophy she found them to be. “Winthrop went into first position,” said Cranston, who would not say which other three New York firms had made her short list. However, Pillsbury was rumored last year to be in talks with New York’s Hughes Hubbard & Reed. For Cranston, the 132-year-old firm was all she could have hoped for and more: an established Manhattan address, instant entr�e into New York’s financial markets, a family of offices on three other continents, and a firm that reminded her of her own — but on a smaller scale. The attraction went both ways. Both firms are more than 100 years old and have a list of old “blue-chip” clients, but are striving to give themselves presence in the new technology-driven economy. And both firms in the last two years have undergone a change in leadership, with control being passed to a younger generation of managers intent on globalizing and growing. But both firms have also seen their fortunes decline in the last decade, with Pillsbury slipping from 28th place on The American Lawyer magazine’s rankings in 1990 to 46th in 1999. Similarly, Winthrop dropped from No. 53 in 1990 to No. 100 last year. The individual strengths of each firm appear to complement each other. Pillsbury understood the importance of an international presence and knew that having just one lawyer in Tokyo was not enough. Winthrop, in turn, claims that 50 percent of its revenue comes from international work, and has offices in Singapore, Hong Kong, Sidney, Tokyo and London, with plans to open a small office in Beijing later this year. “Many of their clients are global and globalizing; they need representation abroad,” said Winthrop chairman John Pritchard about Pillsbury. Pillsbury wanted a firm that could help it boost its corporate presence as well. Pritchard says that more than 60 percent of Winthrop’s work is in the corporate-transactional arena. The smaller Winthrop has 180 corporate lawyers, about the same as Pillsbury. And with Wall Street just blocks away, Cranston says Winthrop will be able to help Pillsbury serve clients with needs in New York’s financial markets. On its end, Winthrop had been watching its competitors getting larger and larger, and knew that it had to grow in order to survive. Pritchard said the firm’s core practice areas are in securities, finance and mergers, and acquisitions, but that it “needed greater critical mass in those practice areas.” “It will enable us to compete on that level in a way we couldn’t before,” he said. On top of that, Winthrop was a late bloomer in technology law and had only organized an “emerging companies” group in the fall of 1999. Pritchard and Winthrop managing partner Michael Schumaecker said they were thrilled to find in Pillsbury a firm that has 130 intellectual property lawyers, including a large patent group, many of whom it gained in its 1996 merger with Washington, D.C., IP boutique Cushman, Darby & Cushman. “I don’t want to say that we had no IP capability at all, but we knew that in order to be successful we needed a pretty substantial IP practice,” Schumaecker said. “Large firms don’t normally have patent capability, and we’ve been outsourcing all of our patent work forever,” he said, and added that it was a strain on Winthrop to do so much mergers and acquisition work without in-house patent law capabilities. TWO OF A KIND And both firms say they found kindred spirits in each other’s relationship with — and dependence on — old-line clients. “We wanted a firm that thought the old economy was just as important as the new economy, and we were impressed in our first conversation with Mary to find out that was exactly Pillsbury’s view,” Schumaecker recalls about the initial breakfast. But still, Winthrop lawyers sometimes characterize Pillsbury as a glamorous older cousin who will usher them into the Silicon Valley tech scene — a view that some say is overly romantic. “Both firms are centered in the old economy,” said a managing partner at a top-tier San Francisco firm, “and this merger doesn’t help either firm establish a technology practice.” “That kind of feedback is probably just dated,” replied Pillsbury’s tech rainmaker Jorge Del Calvo, who said the firm has been adding tech lawyers at a pace of 40 percent a year for the last four years. But while San Francisco Bay Area lawyers love to chortle about Pillsbury being only a minor league player, the firm boasts of recent successes. It represented eGain Communications Corp. in the acquisition of two companies and helped Network Solutions Inc. sell $1.9 billion in stock. But at least one former partner is skeptical that Pillsbury can pull off a great measure of success with the merger. “We’d done a couple of mergers while I was there, and none of them had been particularly successful,” said Bruce McDiarmid, a Skjerven Morrill MacPherson partner who left Pillsbury last year after 26 years with the firm. “We had management problems with the others, and you would think that with a large New York firm it would be even harder.” In 1991, Pillsbury merged with Los Angeles’ Lillick & McHose and acknowledges that some problems ensued. Just after the merger, a recession occurred in Los Angeles and Japan, home of many of the office’s clients. That meant a decline in business. The office still has fewer lawyers than before the merger, but Park said the L.A. outpost has made progress. She said it has streamlined some practices while expanding its intellectual property group. An insurance defense practice has been dumped, and the firm finished off an expensive lease for space that was rendered useless after the merger. Park also says the Winthrop merger has already brought in a handful of Los Angles-based clients. “They’re actually poised to be a very profitable office now,” Park said. BUILDING A TECH PRACTICE In 1995, Pillsbury merged with Washington, D.C., intellectual property boutique Cushman, Darby & Cushman and gained 90 lawyers. The firm says the marriage has raised the profile of Pillsbury’s IP practice and touts having been selected to defend a large group of retailers in a patent infringement suit filed by the Lemelson Foundation. “The Cushman merger has not escaped the attention of the business community,” said Howrey Simon Arnold & White patent group head Robert Taylor, who left Pillsbury in 1995 after 25 years with the firm. Since Pillsbury agreed on the terms with Winthrop last summer, Park has been managing the nuts and bolts of the merger. Since beginning to integrate the firms, partners have struggled to work out management kinks — among them, client conflicts. Winthrop had no computerized system for recording clients, and the firms have had to do a manual check of records to locate conflicts. Throughout both firms, partners seem enthusiastic about the increased opportunities they think the merger will bring. “A lot of our clients are now national and international, and we need to follow them,” said Pillsbury finance lawyer Michael Halloran, a former general counsel with Bank of America. “With this merger we will be located in a number of financial centers throughout the world.” WINTHROP, STIMSON, PUTNAM & ROBERTS Number of attorneys: 260 Profits per partner: $520,000 1999 revenues: $124 million PILLSBURY MADISON & SUTRO Number of attorneys: 583 Profits per partner: $505,000 1999 revenues: $252.5 million Source: The American Lawyer and firms

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