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Cooley Godward and Orrick, Herrington & Sutcliffe have abandoned merger talks, according to sources close to both firms. One of those sources, who was familiar with Cooley Godward’s end of the negotiations and spoke on condition of anonymity, said, “We have ended discussions mutually and amicably.” The firms had been talking since the beginning of the year though partners were not called upon to vote on a deal. Leaders at both firms refused to comment publicly on a possible Orrick-Cooley combination and on talks ending. The end of the negotiations prompts more questions about what the firms plan to do next. Both Cooley and Orrick have been searching for merger partners and the breakup of their talks means both firms will likely be out trolling for new prospects. Cooley Godward Chairman Stephen Neal said in March that the firm was looking to cement a deal and that he hoped to find a good candidate this year. Neal said he wanted a firm with a big New York office, strong litigation and corporate practices, healthy finances and a European office or interest in developing one. By all appearances, Orrick has all of those things. Orrick Chairman Ralph Baxter Jr. hasn’t made such a public pronouncement about his firm’s merger hopes. But Orrick has been considering whether to acquire Menlo Park, Calif.-based corporate boutique Venture Law Group. Orrick and VLG have had a client-sharing agreement since 1999. The status of those discussions is unclear. Donald Keller Jr., who handles VLG’s daily operations, refused comment. The firm, however, is no doubt in play. VLG co-founder Craig Johnson told a United Kingdom publication in May that his firm had spoken to Orrick about a possible merger. The flurry of partner hunting isn’t limited to the San Francisco Bay Area as the legal industry continues to consolidate. But technology law firms are in a tough spot, said Ward Bower, a principal at law firm consultant Altman Weil Inc. in Philadelphia. “From Cooley’s standpoint, it’s probably [about] survival,” Bower said. “The technology market is not going to sustain all of those specialty firms.” An Orrick merger would have put Cooley’s lawyers in a position to ply their skills on a broader range of clients, Bower said. VLG, which focuses on startups and has insisted upon shares of stock in its clients, faces the same challenge as more lawyers have become adept at representing startups, Bower said. “It was a business model that was innovative and certainly influenced the rest of the profession in the 1990s,” Bower said. “But the learning curve is one that the rest of the profession came up on very quickly.”

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