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On Sept. 20, Piper Rudnick and Verner, Liipfert, Bernhard, McPherson and Hand put pen to paper and signed a deal that merged Piper’s 800-plus attorneys with Verner’s 81-lawyer outfit, effective Oct. 1. And while the two firms started seriously talking only a few months ago, the real genesis of the Piper-Verner merger occurred two years and 10 months ago. That’s when Baltimore’s Piper & Marbury and Chicago’s Rudnick & Wolfe, two firms of nearly equal size, well-respected but lacking visibility outside their regions, joined forces. What has emerged is a national firm — Piper Rudnick — with serious international ambitions for the near future. “We went into it with a leap of faith that it would happen,” says chief operating officer Jeffrey Liss, “but nobody knew.” Since the merger, the firm has added an office in Los Angeles, doubled the size of its New York presence, and anchored some major clients, including Marriott International Inc. In the past month, though, Piper has moved front and center with a series of aggressive moves: the merger with Verner Liipfert; a strategic alliance with a consulting group led by former Defense Secretary William Cohen; and the addition of Thomas O’Neil III, the former senior vice president and general counsel of the MCI Group at WorldCom Inc. Piper now has immediate clout on K Street, as well as a sizable international practice, a strong employment group led by former Verner CEO Peter Pantaleo, and a fledgling corporate governance practice. Over the past few years, “they’ve really metamorphosed,” says legal recruiter Cynthia Sitcov of Sitcov & Director. Before, she says, “you didn’t really think of them in terms of having this kind of platform.” But the transition from two regional names to one national player has not always been smooth. Piper, for a while, made an aggressive move into the venture capital and tech arena on the shoulders of Edwin “Ned” Martin Jr., the co-chair of its business and technology practice group. That meant that the firm “was not immune to the downturn,” says Sitcov. As of April, the D.C. office housed 235 attorneys, 20 fewer than a year earlier. Liss, based in Piper’s D.C. office, attributes the reduced number to attrition, layoffs, rigorous performance reviews and the decision to move personnel to the Reston, Va., outpost. The addition of Verner will push up D.C.’s numbers, making it the firm’s largest office. Piper Rudnick is also bringing in a smaller first-year associate class — six are starting this fall, seven fewer than in 2001. As Piper continues to bulk up with senior-level laterals — many of whom come with profitable books of business — this trend may continue. “I would not expect that we’re going to have a huge summer associate class next year,” says Liss. “The first-year class is only one way you grow.” And questions remain about whether Piper can continue to transition into an even larger national firm — and, eventually, a global presence — without taking on too much. Firm leaders know they need to still solidify the New York and L.A. groups, and they talk boldly about moving into Northern California, site of the dot-com bust. They also speak of opening international offices within a few years. FORM FITTING Future plans for global growth do not have Piper abandoning its roots, though. Leadership at the Piper of today sees the strength — and future — of the firm in its past. “Piper [& Marbury] had a fine, small real estate practice in Baltimore” and no real estate attorneys in the District, explains Jay Epstien, co-managing partner of the D.C. office. Rudnick, on the other hand, had a much larger real estate group. Also, Rudnick’s D.C. office, which held approximately 35 real estate and franchise lawyers, had only a couple of litigators. “In the case of the litigators,” says Epstien, “they got folded into an incredibly strong litigation group in Baltimore and D.C.” Liss ticks off what he sees as the firm’s most important practices: real estate law, franchise work, litigation and regulatory work, as well as white-collar litigation in the D.C. office. Adds Francis Burch Jr., the co-chair of the firm: “We’re still focused on a number of discrete areas where we believe we can compete with anybody.” The combination of Piper’s and Rudnick’s traditional practices has brought the new firm a financial windfall. Clients responded to the growth by hiring the firm for additional services, and the money followed. Firmwide gross revenues in 2001, despite a declining economy, were up 8.1 percent to $382 million, according to The American Lawyer. Profits per equity partner jumped nearly the same percentage, to $605,000. Burch expects similar growth for 2002. “I’m intrigued and impressed by their willingness to take bold steps to deal with the problem of being local and regional,” says Eric Bernthal, the D.C. managing partner of Latham & Watkins. “That’s a very challenging position to be in,” and it can be difficult to “break out of that mold and provide a greater level of services.” One client that has followed the firm’s post-merger growth is Marriott International. The Bethesda, Md.-based company was an old Piper & Marbury client — mostly for ERISA work. “Marriott had made it clear to us that they were willing to establish a broader partnering relationship,” says D.C. partner Theodore Segal. “Right around that time, we did our merger with Rudnick.” Rudnick’s franchise expertise was attractive to Marriott, which deals with hospitality services worldwide, and it “has become an anchor client of the firm and of the D.C. office,” says Segal. He declines to reveal the firm’s annual billings to Marriott, but Segal says they have “increased significantly.” With another old Piper & Marbury client, Indiana’s Great Lakes Chemical Corp., the merger kept the firm from being cut from a list of outside counsel when Great Lakes pared down its advisers last year. Traditionally, the firm handled some of Great Lakes’ pesticide regulatory work. “Because of the merger,” says Liss, “we were in a position to make a very credible case” to remain on the outside counsel list. “Now, we’re doing not only the original pesticide work, but also a lot of real estate work,” as well as trademark, commercial litigation, and environment work. HIRING HALL Liss isn’t content. He says the leaders of Piper and Rudnick worked together for 18 months before consummating the merger in November 1999, deliberately working out a white paper on how to combine operations. Liss, 51, played a key role in that effort and is likely to remain a central player in further growth. “Just because we’ve had a very successful Piper-Rudnick merger doesn’t mean we don’t have to keep working at it,” he says. Piper sees immediate growth opportunities for its 100-plus lawyer New York office and in California, where it already has nearly 25 Los Angeles attorneys. The L.A. office, opened in January 2001, gained three partners and three associates last month from nearby Preston Gates & Ellis. While the growth in New York and Los Angeles has centered around laterals and groups of laterals, for a while in 2001, Piper was on the path to a merger with San Francisco’s McCutchen, Doyle, Brown & Enerson. Talks fell through, and McCutchen’s 300-plus attorneys merged earlier this year with Boston’s Bingham Dana to form Bingham McCutchen. Even though the merger with McCutchen Doyle hit the skids, and growth has so far been on a piecemeal basis, “that doesn’t mean we wouldn’t be open to a merger,” says Liss. Today, Piper is not in active merger talks but is looking at possible lateral hires in New York, says Burch. After securing its place on both coasts, Piper’s next moves will be abroad. “One missing piece geographically is the international piece,” says Liss. While the plan sounds good on paper, Piper’s growth occurs mere moments after some national firms grew dramatically — and then laid off just as dramatically. Part of Piper’s West Coast push is into technology-focused Northern California. “It’s an odd time to be growing in that market,” says Latham’s Bernthal, who says the firm may be trying to “take advantage of the turmoil in the marketplace and grab opportunities while they can.” And, as Bernthal notes, “the Brobecks of the world chased a particular sector of the market, and chased it feverishly. I think Piper’s being much smarter about that.” For a firm that has global ambitions, bulking up with Verner Liipfert and its much-storied lobbying group also makes sense. But Verner Liipfert, which has struggled recently, brings some baggage. Over the past two years, Verner Liipfert has more than halved in size. It has laid off dozens of lawyers. And some top partners, such as 25-year firm veteran Thomas Keller, who went in-house at the Association of American Railroads, and Clinton Vince, a rainmaker and former co-chair of the firm, are gone. Verner, well-known for its lobbying practice, also closed branch offices in Austin, Texas, and Houston, and downsized its Miami presence. Verner Liipfert’s tiny Miami and Las Vegas offices will remain open, and Piper has no current plans to expand them, says Liss. Former Senate Majority Leader Robert Dole, R-Kan., who had been a key part of Verner Liipfert’s government affairs team since 1995, is not joining Piper yet, and may never join. He has said he is waiting until after his wife’s Nov. 5 Senate race in North Carolina is over. “We would suspect that if Verner were not having those issues, [the merger] would not have happened,” says Angelo Arcadipane, managing partner of Dickstein, Shapiro, Morin & Oshinsky. But, he adds, that “doesn’t mean it’s not a smart move for Piper.” Despite the probable loss of Dole and Verner Liipfert’s recent rocky history, the names left at the firm — for example, former Senate Majority Leader George Mitchell, D-Maine, and former Michigan Gov. and U.S. Ambassador to Canada James Blanchard — are known in the right Washington circles. Plus, the Piper-Verner mix comes on the heels of the strategic business alliance with the Cohen Group. Says Latham’s Bernthal: “If they have pretensions to be a global player, they need a strong Washington presence.” With this most recent one-two punch — allying with the Cohen Group and merging with Verner Liipfert — Piper appears to be following that advice.

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