Locke Lord, Patton Boggs Call Off Merger Talks

, The Am Law Daily

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Road Splits

UPDATE: 12/19/13, 5:45 p.m. EST. A joint statement from Patton Boggs and Locke Lord has been added to the third paragraph of this story.

Patton Boggs and Locke Lord have ended discussions about joining forces, and leaders of the two Am Law 100 firms are slated to inform their respective partnerships Thursday afternoon that the negotiations are over, according to a source familiar with the matter.

The two firms began discussing a possible union in September, with outside accounting firms being brought in to mull the merits of a potential combination, according to our previous reports.

"Following preliminary talks and routine due diligence, Locke Lord and Patton Boggs have decided to jointly end their recent discussions regarding a possible combination," said a joint statement issued by both firms. "We enjoyed getting to know each other and learning about our firms' respective philosophies and strategic plans. The discussions were informative and beneficial in creating new friendships and referral opportunities."

For Patton Boggs, 2013 has been a year of transition that saw the firm make changes to its “eat-what-you-kill” compensation system and undertake two rounds of lawyer and staff layoffs to save $20.2 million. The firm has also been actively searching for a merger partner in New York, according to a report earlier this month by sibling publication the New York Law Journal.

A complicating factor in Patton Boggs' discussions with potential merger partners is the fallout it could suffer as a result of its role in the bitter litigation battle being waged between Chevron and Ecuadorian plaintiffs over the energy giant's alleged toxic contamination of a swath of rainforest in the South American nation. Chevron has filed a counterclaim against Patton Boggs in the case, and two sources familiar with the matter told The Am Law Daily that the firm's potential liabilities on that front contributed to Locke Lord’s decision to call off merger talks.

Last month Locke Lord managing partner Jerry Clements told The Am Law Daily that the potential liabilities and "reputational aspects" of the Chevron matter were a key part of her firm's due diligence efforts in evaluating a merger with Patton Boggs. Locke Lord represents a number of companies in the energy sector. The firm recently advised Tulsa-based NGL Energy Partners on its $890 million acquisition of The Gavilon Group's oil transportation and pipeline business.

Patton Boggs, a firm known for its robust lobbying practice, ceased its advocacy efforts for the Ecuadorian government this summer. The firm has been busy this fall filing a number of suits against former clients seeking payment of delinquent fees, according to a recent report by sibling publication The National Law Journal.

With Patton Boggs and Locke Lord ending their discussions—the combined firm would have been named Locke Lord Patton Boggs—three potential mergers that would have united Am Law 100 firms have now collapsed in recent weeks. Pillsbury Winthrop Shaw Pittman and Orrick, Herrington & Sutcliffe ended their talks in late November, while Dentons and McKenna Long & Aldridge also called off their discussions about a possible combination.

Other firms, meanwhile, have found success in forging new unions. Using data compiled by legal consultancy Altman Weil, The Am Law Daily reported late last month that 2013 would be a record-setting year for U.S. firm mergers. Last week Littler Mendelson added to its Swiss verein network by absorbing a firm in Puerto Rico, while Polsinelli entered Atlanta this week by acquiring an 11-lawyer litigation boutique, according to sibling publication the Daily Report.

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