Piper Rudnick, DLA to Combine
Partners at the U.S. law firm Piper Rudnick and London-based DLA voted to merge, creating the world’s third-largest law firm by number of lawyers.
The merger will be completed Jan. 1, the firms said in a statement. The combined firm will have 2,700 lawyers across 49 offices in the U.S., Europe and Asia, with estimated 2005 revenue of $1.5 billion and one of the biggest international practices in real estate, litigation, lobbying and technology.
The combination will be Piper Rudnick’s second merger in less than two months, after an October union with Palo Alto-based Gray Cary Ware & Friedenrich.
The firm, to be called DLA Piper Rudnick Gray Cary, will be the first to target “everyday” legal services such as property and litigation through a major international merger, said Ward Bower, a principal at consulting company Altman Weil Inc.
“This isn’t a play to be a leading capital-markets” or mergers-and-acquisitions firm, said Bower, an advisor to both firms. “This deal is about creating a global corporate and commercial services firm to service global clients, which is a very different, and very open, segment of the market.”
Surging capital markets and record demand for deal advice in the late 1990s and early 2000 led to multinational mergers by firms such as Clifford Chance, the world’s largest, and British-based Freshfields Bruckhaus Deringer. The last Anglo-American merger by a top-10 law firm was between Cleveland-based Jones Day, the world’s seventh-largest law firm, and London-based Gouldens in February 2003.
“There’s never been a merger like our merger,” said Piper Rudnick co-Chairman Lee Miller. “Our firm will become the only one with 1,300 lawyers on both sides of the Atlantic.”
Piper Rudnick’s clients include MCI Inc., formerly known as WorldCom Inc., Altria Group Inc.’s Philip Morris International and pharmaceutical company Wyeth. Former Texas Rep. Dick Armey and former Michigan Gov. James Blanchard are lawyers in the firm’s government affairs group, which has an alliance with former U.S. Secretary of Defense William S. Cohen’s consulting group. Piper Rudnick had net income of $169.5 million on $502 million in revenue in 2003.
DLA has more than 200 real estate lawyers advising clients such as Wal-Mart Stores Inc.’s ASDA Group Ltd. and Dixons Group, Britain’s largest consumer electronics retailer. The firm also specializes in insurance, communications and regulatory law. DLA had profit of 91.2 million pounds on 275.4 million pounds in revenue for the year ended April 30.
Both firms have used mergers to expand geographically. Piper Rudnick was formed by a 1999 union between Baltimore’s Piper Marbury and Chicago-based Rudnick & Wolfe. It has since merged with three smaller firms in addition to Gray Cary: Washington-based Verner, Liipfert, Bernhard, McPherson & Hand, San Francisco’s Steinhart & Falconer and Paris-based Cariddi, Mee, Rue.
DLA revenue has increased by 97% over the last five years after mergers with firms in countries including Spain, Italy, Germany, Belgium, Austria and the Netherlands. The firm also has offices in Shanghai, Bangkok and Singapore.
“It’s not the first rodeo for either one of us,” said Piper Rudnick co-Chairman Frank Burch. “No firm in the United States has done more of it successfully than we have and no firm outside the United States has done it more successfully than DLA has.”
DLA and Piper run the risk of diluting their brands if they are merging to add numbers, rather than expertise, said Mark Jones, managing partner of London-based Addleshaw Goddard, a competitor of DLA.
“I cannot see any rationale behind the merger other than creating a firm that is very big,” Jones said.
Clashes over management styles and pay have stalled other transatlantic deals, including between Washington-based Fried Frank Harris Shriver & Jacobson and London-based Ashurst, and have led to partner defections at firms that have completed mergers.
