Both Firms Have Had Discussions With Other Firms;  Mixed Signals As to Status.

[ by Howard Haykin ]

New York-based Pillsbury, Winthrop, Shaw, Pittman and the smaller Washington-based Dickstein Shapiro are in merger discussions, reports Reuters based on 3 sources familiar with the matter.  Leaders from the 2 firms have attended several meetings with each other over the past month.

While one source described the talks as "serious and ongoing," another said the merger is far from a done deal.  A third insider gave a bleaker picture, saying talks may even have already collapsed over concerns about the financial structure of the transaction.

One Dickstein partner confirmed on Monday that the firm has recently been in merger discussions with a handful of law firms, though he said he didn't have sufficient information to comment on whether Pillsbury was among them. He said, however, that Dickstein had considered Pillsbury as a merger partner in the past.

It could not be determined whether either law firm was simultaneously pursuing mergers with other firms.

Statements from Firms.   On Monday, a Dickstein spokesperson issued a statement saying the firm planned to remain strategic in its growth plan and cited a "rock-solid, debt-free financial platform."  She added that the firm was "very optimistic" about its future, but declined to comment on the Pillsbury merger discussions. A Pillsbury spokesperson declined to comment on "rumors or speculation."

Firm Profiles.   Pillsbury has 615 lawyers, while Dickstein has 340 lawyers.  Many law firm mergers have recently been triggered by increased pressure to meet clients' global demands to seize market share from competitors and establish better-known brands.   Pillsbury grossed $527 million and recorded profits per partner of $1 million in 2011, while Dickstein grossed $247 million and recorded profits per partner of $915,000 in 2011, according to the American Lawyer.

If a deal is consummated, Dickstein, which has at least 200 lawyers in the Washington office, would strengthen Pillsbury's government contracts, intellectual property and insurance practices.  For Dickstein, a merger would bolster its energy and corporate practices and give it a presence in markets including San Diego, Houston, Shanghai, Abu Dhabi, Tokyo and London.

Pillsbury's clients have included General Electric, Chevron Corporation, Morgan Stanley and AT&T, while Dickstein's have included Pfizer, DuPont and Kraft Foods, according to the firms' websites.

Some Pillsbury partners have expressed anxiety over the proposed deal, with at least one fretting about how the merger could affect his practice, according to a source familiar with the situation. A group of Dickstein partners expressed optimism about the deal, according to another source. It is unclear whether a merger would result in layoffs, demotions or promotions.

Dickstein is just the latest of several law firms that Pillsbury has entertained in merger talks.  Last year, Pillsbury was in discussions with the international law firm Fulbright & Jaworski, before Fulbright announced in November that it would merge with Norton Rose, a partner at Fulbright said. Before that, Pillsbury considered combining with, among others, Nixon Peabody and Chadbourne & Parke, according to media reports.

Dickstein last year engaged in merger discussions with Hunton & Williams before the talks ended because of client conflicts, according to a Hunton & Williams partner.   [Reuters, 12/17/12]