Fulbright and Pillsbury Kick Each Other’s Tires… Again

By Mark Curriden, Senior Legal Affairs Writer
mark.curriden@texaslawbook.net

February 12, 2012 – Two major national law firms – Fulbright & Jaworski and Pillsbury Winthrop Shaw Pittman – have talked for months about a possible merger. Apparently, they are talking again.

The more recent discussions between the Texas-based firm and the California-based firm have been described as “preliminary” and “kicking each other’s tires” to “serious” and a “good fit.”

If Fulbright and Pillsbury are not serious about merging, says one legal industry insider, they need to be.

The combined law firm would have more than 1,500 lawyers and annual revenues exceeding $1.1 billion, which would make it the 15th largest law firm in the U.S.

Both firms boast strong energy and technology practices. Fulbright is heavy in litigation, while Pillsbury is stronger on the corporate side. Fulbright has more than 500 lawyers in Texas and more than 900 globally. Pillsbury has about 650 lawyers firm-wide, 28 of those are in Houston. But it wants more. Many more.

“These two law firms are a good fit,” says a law firm consultant who has spoken with partners at both firms. “They are two great old law firms that are facing uncertain futures and disappointing revenues and profits during the past couple years.”

Pillsbury’s revenues remained flat in 2010 and 2011, while Fulbright’s revenues and profits-per-partner declined in 2011. Both experienced layoffs in 2009 and both need to do significant trimming of staff and unproductive partners, whether they merge or not, according to lawyers interviewed by The Texas Lawbook.

“Pillsbury desperately wants to grow bigger in Texas and especially in the energy sector, which is a significant strength of Fulbright,” says the consultant, who asked not to be identified.

The big question is whether the two law firms will generate more revenues and make higher profits combined than they do separately, according to a Fulbright partner familiar with the discussions.

Fulbright has 17 offices globally, while Pillsbury has 14. They overlap in six cities. Fulbright has offices in Beijing and Abu Dhabi. Pillsbury is Shanghai and Dubai. Combined, the two firms would have more than 250 lawyers in New York.

The two firms share a significant number of clients, including Chevron, ConocoPhillips, Duke Energy, Valero Energy, and AT&T.

“If our client synergies significantly outweigh the potential client conflicts, then I think this merger will happen,” says a partner at Pillsbury, who asked not to identified. “I think our side is definitely serious. I hope Fulbright is, too.”

No lawyer at either law firm would talk publicly about merger discussions. A half-dozen Fulbright partners contacted over the weekend said they were unaware if talks had gone beyond the preliminary stage.

“There’s a difference in ‘talking’ and ‘walking,’” says a Fulbright partner who talked on the condition of anonymity. “The impression that I’ve gotten is that we’re kicking each other’s tires.”

Rumors of a possible Fulbright and Pillsbury merger surfaced early last week. At the end of the week, The Los Angeles Daily Journal, a highly respected legal publication, cited sources that the two firms were in talks.

The Daily Journal cited one source as saying that “discussions are far enough down the line that both firms have made an agreement not to poach lawyers from each other for a certain period of time, which typically happens after financial information is exchanged.”

Last year, Fulbright had merger discussions with London-based Norton Rose, which has about 2,900 lawyers. But those talks reportedly ended because conflict conflicts were simply too great.

Pillsbury was founded in San Francisco in 1868 in the years following the California Gold Rush. It’s primary clients were Chevron and AT&T, which are also Fulbright clients.

Both law firms have excellent brands, but even the Pillsbury lawyer said that Fulbright has the much more recognized name in the energy sector.

“Pillsbury is looking to merge with another law firm and Fulbright is looking to merge with another law firm,” says the consultant. “I think they have about as much chance of reaching an agreement as do any two large law firms.”

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