The embattled Washington law and lobbying firm Patton Boggs has signed a letter of intent to merge with the larger Squire Sanders, according to three sources familiar with the matter.
Patton Boggs leaders projected that any deal would take place before the end of April, two of the sources said.
A letter of intent was signed earlier in March to formalize the two firms' commitment to advancing merger talks, said the sources, who did not want to be named because they are close to the firm.
The letter "doesn't guarantee anything, just that they are moving forward at a very rapid speed," said one former Patton Boggs lawyer. "They're on the verge of a merger."
Patton Boggs managing partner Edward Newberry did not respond to a request for comment. Nor did Squire Sanders's chair and global chief executive officer, James Maiwurm.
The merger talks, announced February 26, are considered by former Patton Boggs lawyers and legal experts as a "make-or-break" deal for Patton Boggs because it has come under growing financial strain.
In January, the firm reported revenue had fallen in 2013 by 12 percent compared to 2012, to $278 million, according to figures in an internal memo obtained by Reuters.
The firm failed to give partners their monthly February payments on time, according to three sources familiar with the matter. Instead, it paid them during the first week in March.
"If this merger doesn't transpire, for whatever reason, the odds are extremely high that the various (Patton Boggs) practice groups will split to the four winds," said Bruce MacEwen, a law firm management expert.
Already, a number of Patton Boggs partners have headed for the exit. Layoffs in 2013, as well as partner defections, leave the firm - which had 600 professionals in 2011 - with about 380 lawyers and consultants.
On Monday, law firm McGuire Woods announced it had hired Rosemary Becchi, a Patton Boggs tax and employee benefits partner in Washington. The head of Patton Boggs's commercial litigation and antitrust group, Benjamin Chew, is joining Pillsbury Winthrop Shaw Pittman, according to two people familiar with the matter.
Some key partners, however, have agreed to stay. Robert Luskin, a top white-collar defense partner, told the National Law Journal earlier this month that he and his team had no intention of leaving.
Squire Sanders, founded in Cleveland, has 1,300 lawyers.
MacEwen said if Patton Boggs loses too many partners, it risks ruining the possible deal with Squire Sanders because Squire Sanders is interested in acquiring a particular set of partners whose practices would benefit a combined firm.
(Reporting by Casey Sullivan; Editing by Ted Botha and Leslie Adler)