By Kevin Bogardus - 10/29/13 06:00 AM EDT
The king of K Street might have its sights set on world domination.
Patton Boggs is reportedly in the early stages of merger talks with the Dallas-based law firm Locke Lord, a move that could take the powerhouse firm to new heights.
“This business is going global. The lobbying business is going global. To do that effectively for clients, it is good to have a global entity,” said Manny Rouvelas, a partner at K&L Gates.
Lobbyists said the merger talks reflect how advocacy is increasingly without borders, requiring action not just on Capitol Hill, but in the European Parliament, even Asia, South America and beyond.
“A policy component is needed for a global law firm, not only in the capital, but in state capitals, in Brussels, in Hong Kong and elsewhere,” Rouvelas said.
Patton Boggs has entered preliminary talks to consider a possible merger, according to an individual familiar with the matter. Reuters reported on Sunday that the K Street giant had begun talks with Locke Lord to join forces.
Locke Lord could enhance the K Street giant’s reach nationally and worldwide because it has 13 offices, including branches in Hong Kong and London. Patton Boggs has 10 offices, several of which are in the Middle East.
What Patton Boggs brings to the negotiating table is Washington’s premier brand in lobbying.
The firm has beaten the competition in lobbying revenue year after year, and has scored some of the biggest victories in K Street history, such as the $1.5 billion federal bailout of Chrysler Corp. in 1979.
“If you’re a big international firm, and you want to have a major Washington presence, Patton Boggs would be a great merger partner for you,” said John Raffaelli, founding partner of Capitol Counsel.
“They have been the New York Yankees of lobbying,” said Tony Podesta, chairman of Podesta Group, referring to Patton Boggs.
Patton Boggs declined to comment on the merger speculation, but told The Hill the firm is always looking for ways to better serve its clients.
“As a firm policy, we don’t discuss rumors or speculation. All firms that recognize the rapidly changing landscape for the legal profession should be looking for ways to improve their platform for their partners and to better serve their clients, and Patton Boggs is no different,” the firm said in a statement.
“We are constantly evaluating ways to improve our platform and the way that we provide legal services. If we find a combination that accomplishes these goals, we would have an announcement if and when we pursue it.”
Locke Lord responded in kind, saying it too looks for “growth opportunities.”
“Locke Lord never affirms or denies any speculation about potential laterals or potential mergers. In line with our strategic plan, we regularly look at growth opportunities that would benefit our firm and our clients, but we do not comment one way or the other,” said Julie Gilbert, a spokeswoman for Locke Lord.
Patton Boggs rules over K Street but has seen its lobbying revenue decline recently. The firm reported $30.7 million for the first three quarters of 2013, down from the $35.2 million it recorded at the same point last year.
The firm also had a round of downsizing earlier this year, laying off 65 employees, including 23 in its Washington office. Patton Boggs also saw 17 partners leave the firm, with some going to rival Holland & Knight.
In addition, Patton Boggs has locked horns with oil giant Chevron in a huge litigation battle that has drawn on the firm’s time and resources.
Locke Lord is only a minor player in lobbying, collecting around $1.1 million in fees this year, according to disclosure records.
If the two firms were to combine, it could help Patton Boggs translate its Washington knowledge into new markets across the globe.
“When we went bigger, we felt like there was a value proposition that allowed us to have a greater reach to leverage what we know to do in Washington across the world,” said Tom Crawford, senior managing director of government affairs for FTI Consulting.
Crawford’s prior firm, C2 Group, merged with FTI earlier this year, which has offices spread throughout the world.
“I have to believe that they are looking at the international marketplace and seeing that is where the growth is and that they need to have a bigger international footprint,” Crawford said about Patton Boggs’s merger talks.
Several lobbyists said that, in order to survive as a big law firm, one has to keep expanding.
“That is the nature of the legal business today. The world has turned to the mega-firms,” Raffaelli said. “It’s very hard to compete and maintain all those offices across the world. You have to be part of a major firm to make it work economically.”
Podesta said there are two trends in the lobbying business now.
“One is to go bigger, bigger and bigger. The other is to go smaller and more niche. You can be successful either way,” he said.