Amid Merger Talks, Patton Boggs MP Touts Strategic Plan

, The Am Law Daily

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Ed Newberry
Patton Boggs managing partner Edward Newberry

Patton Boggs managing partner Edward Newberry told The Am Law Daily on Thursday that his firm's decision to conduct another round of layoffs and engage in preliminary merger talks with Locke Lord are part of a broader strategy that also includes revamping the firm's long-standing “eat what you kill” compensation system and a push to expand in California, New York, Texas and abroad.

Newberry, who assumed leadership of Patton Boggs in 2010 from former managing partner Stuart Pape, confirmed previous reports by Reuters that the firm is in the “due diligence” stage of discussions with Locke Lord. Patton Boggs partners were informed of the talks at an October partners meeting.

While no letter of intent has been signed, a memo written by Newberry this week updating Patton Boggs partners on a range of issues—which Reuters first reported on—notes that Wells Fargo, accounting firms Deloitte and PricewaterhouseCoopers, and legal consultant The Zeughauser Group have been retained to evaluate the merits of a union with Locke Lord.

In the memo, a copy of which was obtained by The Am Law Daily, Newberry noted that Deloitte is advising the firm on pensions and benefits issues, while PwC and Wells Fargo are conducting a financial analysis. Dallas-based Patton Boggs investment funds partner Jeff Cole and Washington, D.C.–based litigation partner Charles “Rick” Talisman, who was recently named the firm's general counsel, are leading the internal team conducting due diligence on the potential Locke Lord deal.

Newberry says that The Zeughauser Group—led by American Lawyer contributing editor Peter Zeughauser—worked with Patton Boggs earlier this year on crafting a strategic review of its operations. “They’re refreshingly direct, candid and aggressive,” Newberry says of the consulting firm.

Founded in 1962, Patton Boggs is the home of name partner and legendary lobbyist Thomas Hale Boggs Jr., who was once responsible for 20 percent of the firm's annual gross revenue. Patton Boggs continues to have one of the country's leading public policy practices among large law firms, recently beating out archrival Akin Gump Strauss Hauer & Feld to take the top spot with more than $106 million in lobbying-related income in 2012, according to affiliate publication The National Law Journal.

But a recent report by affiliate publication Corporate Counsel notes that federal lobbying spending has hit its lowest levels since 2010. That's led some lobbying firms like Patton Boggs to focus on broadening their domestic and global footprint. And expansion can be costly.

Patton Boggs has undergone two rounds of layoffs this year. The latest came Thursday, when the firm laid off 10 lawyers and 35 staffers, a move first reported by The Wall Street Journal. The 10 lawyers and another seven staffers being let go are from the firm's Newark office, which has been particularly hard hit this year. (The remaining 28 staffers will be culled from the firm's nine other offices.)

The Newark branch lost its former managing partner John McGahren in August to Morgan, Lewis & Bockius. McGahren is one of more than 40 partners to leave Patton Boggs since January—including a 12-partner group that departed this summer for Holland & Knight in Dallas—some of which the firm has said publicly were asked to leave.

McGahren, an environmental litigator, was part of a Patton Boggs team representing New York City and hundreds of contractors in a $625 million settlement with plaintiffs who worked at Ground Zero in the aftermath of the Sept. 11, 2001, terrorist attacks. Patton Boggs made more than $120 million in legal fees from its work on those cases, but lost out on additional revenue when they settled on the eve of trial.

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