Pillsbury-Orrick Deal Dies on Conflicts: Business of Law

Pillsbury Winthrop Shaw Pittman LLP and Orrick Herrington & Sutcliffe LLP, two law firms based in San Francisco, have decided not to pursue a merger, the firms said in a joint statement.

“We mutually determined that we will not be able to proceed due to prospective client conflicts that we have not been able to resolve, notwithstanding each firm’s best efforts,” according to the statement, which didn’t provide details on the conflicts.

The firms announced their talks about a possible combination in a statement last month. A decision not to merge was reached prior to the signing of a letter of intent or a partnership vote, according to the statement.

The number of law firm mergers has grown this year to 78 from 60 last year at this date, according to data compiled by law firm consultant Altman Weil Inc. Merger announcements in the fourth quarter reached 20 last week, the company said.

Orrick, a 977-lawyer firm, had $866 million in gross revenue last year, making it the 27th wealthiest firm in the country, according to the American Lawyer, a trade publication.

Pillsbury, with 609 lawyers and $561 million in gross revenue last year, was ranked 56th, according to American Lawyer.

“Pillsbury has long been known to us as a firm with high caliber legal talent and a client-focused culture much like ours,” Orrick Chairman Mitch Zuklie said in the statement. “Large law firm combinations are always complex, and both our firms are disappointed that we could not clear the way for a merger.”

In 1998, Donovan, Leisure, Newton & Irvine, a New York law firm founded in 1929, closed its doors after about 40 of its 60 lawyers -- including 14 partners -- were hired by Orrick. Donovan had previously been in talks to merge with Orrick, a plan that stalled over client conflicts, according to multiple news accounts at the time.

Orrick has 25 offices in North America, Europe and Asia, with more extensive coverage in Europe and Asia than Pillsbury, according to the firm’s website. Pillsbury has 15 offices in the U.S., Europe, Asia and Abu Dhabi, according to its website.

“Orrick is a firm with a longstanding and well-deserved reputation for legal excellence,” Pillsbury Chairman Jim Rishwain said in the statement. “Throughout these discussions, our admiration for Orrick’s attorneys has only deepened.”

RBS Hires Clifford Chance for Internal Business Loans Probe

Royal Bank of Scotland Group Plc appointed Clifford Chance LLP to investigate whether it pushed companies that owed it money into difficulties to boost profit.

RBS said in an e-mailed statement yesterday it appointed the law firm after a report by Lawrence Tomlinson, chairman and founder of LNT Group Ltd., said that once companies were in default, the bank (RBS) could charge them advisory fees and buy their assets at reduced prices. Business Secretary Vince Cable has referred RBS to the Financial Conduct Authority.

U.K. lenders, including 81 percent taxpayer-owned RBS, have been criticized by the government for holding back lending to businesses since the 2008 financial crisis as they boost capital reserves and clean up their balance sheets. The Bank of England earlier this year extended its plan to provide cheap loans to companies and consumers and make credit available for small firms to help support the economy.

“There are many devastating stories of how RBS has wrecked good businesses and the ruinous impact this has on the lives of the business owners,” Tomlinson said in an e-mailed statement.

Chris Hamilton, a spokesman for the FCA in London, declined to comment on the report, as did a spokesman for the U.K.’s Prudential Regulation Authority.

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Moves

American Express General Counsel to Join Cleary Gottlieb

Louise Parent, who has been American Express Co.’s general counsel for more than 20 years, will join Cleary Gottlieb Steen & Hamilton LLP as of counsel in New York after her retirement next spring.

“Louise has been a longstanding member of American Express’s senior leadership team and has overseen strategic transactions, major litigation, and government inquiries around the world,” Mark Leddy, Cleary Gottlieb’s managing partner said in a statement. “She has also led the company’s response to dramatic regulatory changes here and abroad and counseled the board of directors and senior management on the wide range of issues that confront a global enterprise like American Express. Louise brings a unique and valuable perspective that will aid the firm in providing the highest quality advice to our clients across the globe.”

Cleary Gottlieb has more than 1,200 lawyers at offices in the Americas, Europe, the Middle East and Asia.

Baker Botts Adds Two to Corporate Practice in Washington

Transactional lawyers Terry Bessey, previously of Patton Boggs LLP, and Karen Sheffler, who was at Kirkland & Ellis LLP, joined Baker Botts LLP as special counsels, adding to the firm’s corporate practice in the Washington office.

Bessey represents private equity funds and their portfolio companies in mergers and acquisitions, and financing transactions. Among his clients are American Industrial Partners, for which he worked on the pending acquisition of Carlisle Transportation Products business for $375 million, the sale of Micro-Poise Measurement Systems LLC to AMETEK Inc. and the purchase of Weyerhaeuser Co.’s worldwide hardwoods and industrial products business unit, the firm said.

Sheffler represents companies in connection with mergers and acquisitions, divestitures, financings, and other corporate transactions in energy, health care, hospitality and other industries. She represented NRG Energy Inc. in connection with its purchase of Reliant Energy’s retail electricity business and the related $1.5 billion financing and its sale of a 49 percent interest in the 290 MW Agua Caliente solar project to MidAmerican Energy Holdings Co., a subsidiary of Berkshire Hathaway Inc., the firm said.

“Karen and Terry provide our clients -- here in Washington and around the world -- access to a wealth of experience in the complex field of financial transactions,” David Pommerening, chairman of the corporate department in the firm’s Washington office said in a statement.

Baker Botts has approximately 700 lawyers at 15 offices around the world.

Wolff & Samson Adds Public Finance Attorney Scally

Wolff & Samson PC announced that John J. Scally Jr. has joined the firm as a member on the bond counsel team in West Orange, New Jersey. He was previously a partner at Drinker Biddle & Reath LLP in Florham Park, New Jersey.

“John brings a wealth of experience in some of the most sophisticated public financing transactions, and his addition to the firm underscores Wolff & Samson’s commitment to providing the highest quality legal services on behalf of our clients,” David Samson, founding member of the firm, said in a statement.

At Drinker Biddle, Scally worked on financings for clients that included public finance investment banking firms, public power issuers, transportation authorities, nonprofit colleges, universities, hospitals, state and local governments, and private developers, the firm said. He has represented New Jersey and Illinois and several state agencies as bond counsel.

Wolff & Samson has more than 120 attorneys based in West Orange, N.J.

News

Gensler’s Last Stand on Swaps Has Wall Street Calling Lawyers

Wall Street banks reeling from a flurry of activity by departing U.S. Commodity Futures Trading Commission Chairman Gary Gensler are considering taking the agency to court.

Gensler has issued more than a dozen advisory opinions directed at reining in the largest financial firms and swap traders without votes by his fellow commissioners. He’s also insisting on tightening the Volcker rule ban on proprietary trading by banks, making last-minute demands that could derail a regulation that must be approved by five U.S. agencies.

The financial industry’s trade groups have consulted with lawyers about how to block Gensler’s final moves, according to four people briefed on the matter. A lawsuit would probably be focused on CFTC guidance issued in July that described when the agency should defer its rules in favor of regulations by foreign derivatives overseers, the people said.

The Securities Industry and Financial Markets Association, Wall Street’s main lobbying group, recently set up a conference call that included the firms’ general counsels and Gibson Dunn & Crutcher LLP attorney Eugene Scalia, a Washington lawyer who has filed several cases seeking to overturn Dodd-Frank rules.

The International Swaps and Derivatives Association, another Wall Street-dominated trade group, has also consulted with law firm Mayer Brown about the legality of Gensler’s maneuvers, one of the people said.

A lawsuit could be filed as early as this week, the person said.

Scalia and ISDA didn’t respond to requests for comment. Liz Pierce, a Sifma spokeswoman, declined to comment.

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To contact the reporter on this story: Elizabeth Amon in New York at eamon2@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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