International law firm and US based Law firm end merger talks 

Pepper Hamilton and Reed Smith said Friday they have ended merger talks just 10 days after confirming discussions had begun.

Pepper Hamilton sent out an email at 6 p.m. Friday announcing the talks had broken off.

“While we were intrigued when Reed Smith approached us, we determined that moving forward is not in the best interest of Pepper,” the statement read. “Pepper prides itself on talented people providing premier legal services to our clients. These core Pepper values are what we do best, and it is why our firm is held in such high regard by our clients and the entire legal community.”

Pittsburgh-rooted Reed Smith supplied its own statement a short time later.

“While our conversations with Pepper Hamilton were positive and informative, both firms have concluded that for a variety of reasons those discussions should end,” Reed Smith’s statement said.

Neither firm provided a specific reason for why the talks broke down. But a merger of this size — more than 2,000 lawyers involved in over 30 offices around the world — is quite hard to complete. There are client conflicts, cultural issues, management structure and, of course, monetary issues.

The much-larger Reed Smith would have been the dominant partner if the deal had reached completion.

According to the Philadelphia Business Journal’s Book of Business Lists published in January, Pepper Hamilton has the largest number of Philadelphia area lawyers with 294, while Reed Smith is 13th with 157. In total, Pepper has 374 local employees while Reed Smith has 285.

Firm-wide, Reed Smith has 1,890 lawyers spread across 26 offices in the U.S., Europe, Asia and the Middle East while Pepper has 514 spread over 13 offices.

Financial performance metrics seemed to match on the surface and there appeared to be some practice and geographic synergies, though the combined firm could have had as many as 600 lawyers in Pennsylvania alone. And that could have meant some dislocation of lawyers and staff.

Pepper Hamilton, whose name emanates from its founding partner, former U.S. Sen. George Wharton Pepper, has been a fixture on the Philadelphia law scene since opening its doors in 1890.

Source: Biz Journals

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