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LOS ANGELES � Merger discussions between Alschuler Grossman Stein & Kahan and Cooley Godward have ended, throwing into more doubt the future of the top-shelf entertainment boutique and its 100 lawyers. Name partner Marshall Grossman, who planned to take most of the corporate litigators with him to Cooley, said Cooley ended the talks Monday, a month after the Palo Alto-based firm announced it would merge with Kronish Lieb Weiner & Hellman, a New York litigation shop. “It was too much for Cooley to consider absorbing two litigation-dominated firms at the same time,” said Grossman, who spread the news in meetings on Tuesday. For the past several months talks about the firm’s future have created tension and uncertainty. According to sources within the firm, a group of about 40 lawyers who were not interested in the merger are still moving forward with plans to break off and open a Santa Monica office affiliated with New York’s Dreier Law Firm. That move, which will likely include most of the firm’s entertainment and transactional practices, anchored by Stanton “Larry” Stein and Robert Kahan, is expected to be completed by year’s end, according to sources familiar with the talks. Stein declined to comment publicly. Grossman declined to discuss his next step. “For now, we’re focusing on what we need to do.” The Cooley discussions had progressed for several months, overcoming a hurdle over a significant client conflict, but stalling around the time that Cooley merged with Kronish, a 105-lawyer firm that Cooley CEO Stephen Neal has said “is better than any law firm I dreamed of.” Cooley leaders did not return calls seeking comment on the talks. Alan Levine, Kronish’s managing partner, would not comment, saying “I am not getting into any of this.” It isn’t surprising that Cooley’s merger with Kronish would end talks with Alschuler, said Dan Hatch, head of the partner practice in Southern California at Major, Lindsey & Africa. “It’s like the Russian front syndrome � you have to focus on integrating that firm for it to be successful,” Hatch said. “You have to put all your efforts into making New York work, unless the Los Angeles deal is perfect.” The Cooley discussions mark the second round of merger talks for Alschuler this year. Talks with Robins, Kaplan, Miller & Ciresi concluded earlier this year, but set off a round of departures including rainmaker Mark Neubauer and several other partners, who left to start a Century City office for Steptoe & Johnson. Even as headhunters have been circling the firm, Grossman said last month the firm’s revenues are at a record high. Consultant Peter Zeughauser predicts the strong practice areas throughout the firm � including both Grossman’s litigation and Stein and Kahn’s entertainment and transactional practices � are a recipe for success, even if they part ways. The possible split “will allow both groups to pursue their own vision, and they are both strong and independent enough to do that,” he said.

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