August 28, 2008 3:23 PM
EXCLUSIVE: Heller Ehrman, Mayer Brown In Merger Talks
Posted by Drew Combs
If at first you don't succeed, try, and try again. It's a maxim that the management at Heller Ehrman has taken to heart over the past year as it has explored merging with one firm after another.
A little over two weeks ago, discussions with Baker & McKenzie, the most substantive of Heller's recent merger talks, broke down due to conflicts.
And now comes word, according to sources close to both firms, that Heller is aggressively pursuing other merger options, of which the most promising is a combination with Chicago-based Mayer Brown.
A spokesman for Mayer Brown declined to comment. Calls to Heller's management were not immediately returned. A spokesman for Heller declined to comment.
The current talks between Mayer Brown and Heller, which began days after Heller's talks with Baker & McKenzie ended, actually represent a second effort to combine the firms.
Merger talks between the firms earlier this year were shelved because Mayer Brown management was leery of conflicts that might arise as a result of Heller's insurance recovery practice, which represents policyholders in coverage disputes with insurance companies.
Mayer Brown represents insurance companies in a variety of litigation and corporate matters.
According to one source, any merger between Mayer Brown and Heller would exclude Heller's insurance recovery practice.
At press time, it was unclear exactly how far talks between the firms had progressed and to what extent partners at the firms knew of the talks. Heller management has been known to keep the partnership out of the loop regarding the firm's merger talks. Mayer Brown partners contacted for comment also professed to be unaware of the talks.
Heller's management has actively sought a merger in recent months to shore up the firm, which lost as many as 25 partners and missed budget projections by 15 percent in 2007.
Heller also reported a 3 percent decline in profits per partner ($1.005 million) in 2007 and the firm's revenue per lawyer fell by 5 percent, to $805,000. The defections have continued in 2008. More than 35 additional partners have left the firm this year, according to reports.
Some of the departing partners over the past two years had been at Heller for decades and took chunks of business with them to other firms, including Milbank, Tweed, Hadley & McCloy, Goodwin Procter, and DLA Piper.
Heller has 14 offices and a roster of 650 attorneys. Mayer Brown has 1,800 attorneys practicing at 21 offices.
Despite the departures, there remains a loyal contingent of partners that have stayed with Heller. And, according to one source, many of these partners believe the firm might be able to make it through its current difficulties without merging.Make a comment