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It is a known fact that Pittsburgh-based Reed Smith has spent much of the past year searching for a way to expand into California. And according to sources familiar with the situation, the name of Oakland, Calif.’s largest law firm, 230-attorney Crosby Heafey Roach & May, has surfaced as a possible merger partner. While management at both firms has declined to respond to specific rumors, Reed Smith partner Michael Pollack, who doubles as director of strategic planning, confirmed that the 725-attorney firm was conducting discussions with California firms and any possible merger there would not be small in nature. “We are not going to talk about names because it’s not at the point where we think that’s the right thing to do,” Pollack said. “But whatever we do, we want to be able to provide as much of a full-service presence as possible. We are not looking for an IP practice group. We want IP, labor, corporate, litigation and other practice areas in California.” Adding a firm like Crosby Heafey to the fold fits a pattern of large, full-service acquisitions that have allowed Reed Smith to more than double in size in the past decade. Most notably the firm added 85-attorney Virginia firm Hazel & Thomas in 1999 and 75-attorney London firm Warner Cranston in 2000. As far back as the Warner Cranston union, Reed Smith chairman Gregory Jordan has been pointing west to California as the firm’s next target area. Such talk became even more pronounced this past December when the firm announced the addition of 26-attorney Parker Duryee Rosoff & Haft to its 35-attorney New York office. Jordan said at the time that a major reason for the Parker Duryee merger was to become more attractive to potential California merger partners. A merger between Reed Smith and Crosby Heafey would create a 955-attorney firm and possibly one of the nation’s 10 largest firms. Such a large addition would allow Reed Smith, which scoffs when labeled a Pittsburgh-based entity, to call itself a national firm — which by The American Lawyer‘s standards means having no more than 45 percent of a firm’s total attorneys located in one region of the country. And while the two firms have compatible financials on the surface, Reed Smith and Crosby Heafey are clearly headed in opposite directions. According to The American Lawyer‘s Am Law 200 survey, Reed Smith’s profits per partner and gross revenue both increased in 2001. The firm’s profits per partner went from $335,000 to $400,000. Conversely, Crosby Heafey saw its profits per partner tumble from $352,000 in 2000 to $314,000 in 2001. Crosby Heafey partner Jack Nelson, who runs the day-to- day operations, recently acknowledged to San Francisco’s The Recorder that partners took home about 20 percent less than they expected in 2001. Crosby Heafey has been known as a strong regional, and sometimes national player in the litigation arena. Recently the firm acted as California counsel for Sulzer Corp. in the $1 billion hip implant case. In the last five years, Crosby Heafey has expanded into San Francisco and Palo Alto and sought to build up its corporate and technology practices. The firm has six offices — all in California: 100 attorneys in Oakland, 50 in San Francisco, 60 in Los Angeles, 30 in Century City and two smaller offices, in Palo Alto and Westlake Village. Crosby Heafey’s management announced earlier this summer that it would entertain merger opportunities with an East Coast partner after suffering through the loss of 13 partners in the last 18 months and being forced to lay off 13 attorneys and 40 other staff members last year. During the past few years, Crosby Heafey has absorbed several smaller firms, with the most recent addition being Oakland boutique firm Bay Venture Counsel in an effort to ramp up its corporate practice. Meanwhile, the firm is thinning less profitable practice groups such as media law, and that change in direction has motivated some of the departures. Earlier this summer, Crosby Heafey tried to stifle a rumor that it was headed down the aisle with Minneapolis-based Oppenheimer Wolff & Donnelly. Oppenheimer and Crosby aren’t dating, Crosby Heafey managing partner Kurt Peterson told The Recorder. “I don’t know where that all came from,” Peterson said. “I’ve never even heard our names mentioned in the same sentence.” Reed Smith is not the only local firm combing California for merger partners. Dechert also has been looking to add a significant West Coast presence, but nothing has come to fruition as of yet. Jahna Berry of The Recorder contributed to this article.

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