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Gray Cary Merger Keeps the Consolidation Trend Going

San Diego’s Gray Cary Ware & Freidenrich LLP wanted to be “in front of the wave” when it agreed to merge with East Coast-based Piper Rudnick LLP, making it one of the 10 largest law firms in the United States.

The new firm will be called Piper Rudnick Gray Cary LLP.

That’s the belief of J. Terence O’Malley, Gray Cary’s chairman and chief executive officer.

“It’s become a relatively common occurrence in the legal profession, reflecting an existing trend toward consolidation,” he said. “Our belief is that ultimately there would be 20 or so mega-firms providing legal service on a global basis to the largest and most successful companies. We wanted to be one of those, to be in front of the wave.”

Since neither firm had an official headquarters before the announced merger, which takes effect Jan. 1, there won’t be an official home base now, O’Malley said.

Gray Cary has about 380 attorneys practicing in Austin, Texas; Sacramento; San Francisco and East Palo Alto; Seattle; Washington, D.C.; as well as San Diego. The firm represents clients in corporate and securities, intellectual property and complex litigation matters.

Piper Rudnick, with 1,000 lawyers in 14 cities, including Boston, Chicago, New York, Washington, D.C., Los Angeles, Baltimore and Paris, specializes in real estate, litigation, business, technology and government affairs.

The combined firm will maintain 20 offices in all major hubs, with projected revenues for 2004 that will approach $800 million, according to a joint statement.

Both firms share a commitment to pro bono and public service, said O’Malley.

“We remain committed to being a strong corporate citizen in San Diego and our charitable and civic activities will not be affected by this,” he said.

And the firms’ employees shouldn’t have to fret about downsizing , a common practice during consolidations.

“This is a growth merger,” O’Malley said. “We had our most profitable year ever in 2003, and 2004 will be more profitable still for both firms. This is all about growth.”

The firms’ clients should be happy, too, he said.

“We’ve had outstanding response from our clients,” said O’Malley. “I believe that this will be good news for the clients, lawyers and good news for San Diego. We’ll be able to bring a greater range of services to San Diego businesses.”

Jody Root, who serves on the management committee for Foley & Lardner LLP’s board of directors, said that the merge gives him a sense of d & #233;j & #341; vu.

“We did this seven years ago,” he said, referring to the firm’s 1996 merger with Weissburg and Aronson, Inc.

Root also spots a consolidation trend, “especially for folks who have national and international practices and they want to get coverage and expertise in certain practices areas.”

“We will see a lot more of these, but not necessarily in San Diego,” he said.

While the legal grapevine usually keeps lawyers in the loop about pending mergers, Root said, “I was surprised to hear about this one. Relatively few of the rumors come to fruition and I’m always surprised when it happens.”

Guy Halgren, the chairman of the executive committee of Sheppard Mullin Richter & Hampton LLP, said he’s noticed a lot of merger activity in the last few years.

“It’s a continuation of a trend, but not an acceleration of a trend,” he said.

Unlike Root, Halgren said he wasn’t surprised by Gray Cary’s merger.

“Piper has been looking for a West Coast partner for several years, and Gray has been looking for an East Coast presence,” he said.

“To an outsider, you never know if a merger is a good one or a bad one,” Halgren added

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