For Joseph Welty, managing partner of Baltimore-based Miles & Stockbridge, merger talks between Piper & Marbury and Rudnick & Wolfe raised again the inescapable question: How big is big enough?

"I couldn't think about this any more than I already do," he said. "I go to sleep thinking about it and I wake up thinking about it."

The merger of the roughly equivalent Baltimore-based Piper & Marbury LLP and Chicago-based Rudnick & Wolfe would create a firm with 710 lawyers and $270 million in annual revenue. The combination, which is months away if it occurs, would vault the firm into the top 25 worldwide, both firms said.

Size is on Welty's mind because Miles & Stockbridge PC has about 190 lawyers -- about half in Baltimore and the other half in offices in Rockville, Frederick, Towson, Easton, Cambridge, Columbia, Washington and Tysons Corner, Va.

"If you're a regional firm and you want to be able to continue to represent national clients or have the ability to pick up work from national clients who might be based elsewhere, you've got to assess how this consolidation affects your ability to compete," Welty said.

The landscape has gotten scary for firms that as recently as 10 years ago would have been regarded as large. Not only are U.S. firms merging to better serve corporate clients with operations in several cities. But European firms are planning international expansions and Big Five accounting firms are using their contacts with business executives to sell legal services.

"There isn't a safe place for local and regional firms that are representing global companies," said Francis B. Burch Jr., Piper & Marbury's chairman.

Ward Bower, a principal partner at Altman Weil Inc., a Newtown Square, Pa., legal consulting firm, calls law a maturing industry -- oversupplied and likely to consolidate.

Bower compared legal work to financial services. Just as banks found themselves competing against brokerage houses and insurance companies, law firms will increasingly face competition from nontraditional players.

"The barriers between accountants, consultants and lawyers are breaking down and the lines are blurring," Bower said.

Accounting firms have already become big legal players in Europe and Australia. "And they are going to do it here," Bower said. "PricewaterhouseCoopers announced in January that they will be one of the largest law firms in the world by 2002," he said.

And he said firms are thinking not only nationally but globally when it comes to mergers. "United Kingdom firms are moving into New York and doing the work that used to be referred to New York firms," Bower said.

Speculation is building about a merger between Clifford Chance, a British firm, and Rogers & Wells, a New York-based firm.

What does all this mean for American firms?

If large American firms feel iced out of Washington and New York work, Bower said, they will go after the work being done by smaller firms on their home turf.

"It's a ripple effect," he said. "Someone is going to lose somewhere along the line," Bower said.

Baltimore firms are taking notice.

Welty said Miles & Stockbridge is examining what kind of firm it would like to be in the future. "What do your clients want? What do your partners want? Given that culture, what makes sense to do?

"At the moment, we're not a firm that wants to be national in that we have places all over the country. We want to have the ability to make heavy investments in practices that make sense for our client base," Welty said.

Questions about the future keep the firm and its partners off-balance and uncertain, Welty said.

Saul, Ewing, Weinberg & Green, the 235-lawyer firm created last year by a merger of Baltimore and Philadelphia firms, for instance, may not be done growing, said Charles O. Monk II, managing director of the Baltimore office.

"Our clients, like Piper's, are looking for a law firm that can represent them across a number of markets with depth in every kind of specialty they need," Monk said.

Venable, with about 300 lawyers a close No. 2 in Maryland behind Piper, is satisfied with the growth it has achieved in recent years, said James L. Shea, its managing partner. He said Venable will consider expansion based not on geography but on practice areas, such as high technology. Possibilities include Florida and California.

"I wouldn't say we're out of the business of growing," Shea said.

He said one striking feature of the Piper-Rudnick proposal is the link between Chicago and Baltimore.

"It's not a path well-traveled," Shea said. "It just seems different."

Philadelphia and Washington firms do a fair amount of business in Baltimore, and Venable has a huge Washington office.

Finally, Shea cautioned against growth for the sake of growth, saying that strategy at some point yields diminishing returns.

"Getting larger is very helpful if you're getting larger with strength," he said. "Size is valuable, but only if it's muscle."

Pub Date: 3/23/99