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Piper Rudnick and the British law firm DLA have agreed to combine in the largest merger of law firms to date. The combined firm, which is to be known as DLA Piper Rudnick Gray Cary, will have 2,750 lawyers in 18 countries, making it the third largest law firm in the world. The impending deal, set to become effective Jan. 1, represents a strong bet on the view that the future of the legal profession will belong to those firms that can be all things in all places to major clients. “All things being equal in this world, you’ve got to be big if you want to represent the clients we have and the clients we want to have,” said Francis B. Burch, one of the two co-chairmen of Piper Rudnick. Nigel Knowles, the managing partner of DLA, said he expected the landscape of full-service law firms to change to more closely resemble the accounting industry, which is dominated by a small handful of firms. “We will be the vanguard of change,” said Knowles. Few law firms have pursued that vision as consistently or aggressively as Piper Rudnick. The firm was itself formed by the 1999 union of Baltimore’s Piper & Marbury and Chicago’s Rudnick & Wolfe. Since then, the now 1,350-lawyer firm has acquired two other well-known U.S. firms, Washington, D.C.’s Verner, Liipfert, Bernhard, McPherson and Hand and California’s Gray Cary Ware & Freidenrich. The merger with DLA will be on a different scale altogether. With more than 1,700 lawyers and legal trainees worldwide, DLA is one of the largest firms in the U.K. Its merger with Piper Rudnick will be the first transatlantic merger between firms of such size. Previous U.S.-U.K. mergers have been acquistions of smaller firms by much larger ones. Some have been plagued with difficulties. Notably, Clifford Chance, which acquired New York’s Rogers & Wells in 1999 and later hired several partners from the now-defunct Brobeck, Phleger & Harrison, has been beset by waves of defections among its top U.S. partners. Burch and his co-chairman, Lee Miller, said their approach was different from that taken by Clifford Chance. In particular, they noted that Clifford Chance attempted to impose its lockstep compensation model upon U.S. partners used to being paid according to business origination. Miller said offices would have a lot of autonomy on compensation and other issues. “The Brits don’t have to worry about being dominated by Americans, and the Americans don’t have to worry about being dominated by the Brits,” he said. The firms are close in terms of profitability. Miller and Burch said DLA had profits per partner around $900,000 while Piper Rudnick’s were more than $800,000. Knowles said the firm would have shared values and a shared vision, but he said that “local cultures” would govern how individual offices were run. Conflicts have been another major issue following mergers. Miller said they had turned up fewer than expected during merger discussions but he acknowledged it could be an issue down the road. “As you get bigger and bigger, it becomes harder to manage conflicts,” he said. “Some you just can’t fix. You’ll lose some business.” But he said he expected any lost business to be minor relative to the business gained from the merger. COMMON PRACTICE AREAS The two firms pointed to several practices where they expected to see benefits from a merger. Both firms have leading legislative and regulatory practices as well as strong litigation groups they hope to bring to bear on a variety of cross-border matters. Real estate and technology are other practices the firms hope will benefit from the merger. DLA is similar to Piper Rudnick in that it originated outside of major financial centers. Though it is now a major presence in London, DLA is still a relative newcomer in the British capital. It continues to maintain offices throughout the rest of England and Scotland in cities like Birmingham, Sheffield and Glasgow. With regard to their corporate practice, both firms also focus largely on middle-market transaction. Neither has any illusions about immediately competing for top-end work dominated in the U.K. by the firms of London’s Magic Circle of top corporate firms, which include Clifford Chance, Allen & Overy, Linklaters, Freshfields Bruckhaus Deringer and Slaughter & May, and in the United States by elite New York firms like Sullivan & Cromwell and Skadden, Arps, Slate, Meagher & Flom. “We think over time it won’t be quite so concentrated,” said Burch. “We’ll capture a little more of that market than if we just played a pat hand.” GLOBAL APPROACH Miller said the firm had made expanding its presence in the financial centers of London and especially New York a major priority. “We need to be bigger and need to be more visible,” he said, adding that the firm’s new global presence would likely attract new lawyers. Piper Rudnick presently has only one overseas office, newly opened in Paris. With the DLA merger, it will gain offices in 12 European countries besides Britain and France. DLA also has Asian offices in China, Singapore and Thailand. Burch, Miller and Knowles will serve as joint chief executive officers of the new firm. They will serve on an executive committee with eight other partners and two non-lawyer advisors. Former U.S. Senator George Mitchell, who became a Piper Rudnick partner through its acquisition of Verner Liipfert, will be the firm’s non-executive chairman, once his term as chairman of the board at the Walt Disney Corp. is finished. Bradford W. Hildebrandt, a law firm merger consultant who advised on the transaction, said Piper Rudnick’s experience with mergers will allow its partners to approach with confidence the daunting task of merging with the much-larger DLA. Hildebrandt said he thought the merger was a significant transaction. “It immediately puts another global player on the map,” he said, noting that other firms, particularly other British firms with no U.S. presence, might have cause to look for partners all the more aggressively. “If I was sitting in a similar firm in the U.K., I’d be looking at every option pretty hard right now,” he said. What others firms do is of small concern to Burch at the moment. “The whole profession doesn’t have to go this way,” he allowed. “As long as our deal works, we’ll be happy.”

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