There’s once a dream that was OrrickPillsbury.
It was exactly a month ago that we first heard that Orrick was looking to join up with (read: bail out) Pillsbury. Today, the thrill is gone. Orrick and Pillsbury announced they were calling off the mega-merger saving us, our planned Very Special Episode of Legal Eagle Wedding Watch.
So what happened?
According to Casey Sullivan of Reuters:
The potential merger between the California-based Orrick Herrington & Sutcliffe and Pillsbury Winthrop Shaw Pittman in New York would have created the ninth-largest firm in the country. It was first reported by Reuters on October 25.
Orrick Chairman Mitch Zuklie and Pillsbury Chairman James Rishwain said a conflict of interest between clients in Orrick’s public finance practice and Pillsbury’s tax, environmental and real estate practices killed the merger.
That’s basically it. At least officially. There’s probably a lot about this beyond a few conflicts that we don’t know.
Often when a firm is hot for a merger, something’s not right. Pillsbury has a hefty number of partners relative to its size — almost a 1:1 ratio of partners to associates — so not much to offer their new partners in the way of leverage. And never underestimate the effect a merger can have on each partner’s bottom line: for example, the partners from one side or the other may have to pitch in a bunch more out-of-pocket to reach the capital contribution of their new colleagues. If Orrick and Pillsbury had some significant gaps there, it could have complicated the deal.
Obviously conflicts can be deal-killers, but then again, neither side would tell the world if internal financial details contributed to today’s cancellation. But it seems like a couple really committed to making it work could have figured out a solution if a few conflicts were the only problem. We all remember how Dewey & LeBoeuf came to an end largely partly because the financials of the two firms never really meshed.