Hoping to bounce back from recent departures and layoffs, Reed Smith LLP is discussing a merger with Philadelphia-based Pepper Hamilton LLP that would create a law firm with more than 2,000 lawyers worldwide and $1.5 billion in revenue.

Reed Smith confirmed on Tuesday that the firm has had preliminary discussions with Pepper Hamilton, which has about a quarter the lawyers and a third of the revenue of the Downtown-based firm.

“We see many potential benefits to joining forces,” the company said in a statement. “Reed Smith has been clear about its interest in strengthening its industry focus and adding to strategic practice areas. In executing this strategy, we speak regularly with law firms around the world regarding our respective objectives.”

The statement continued, “As part of that process, we have had preliminary discussions with Pepper Hamilton, a firm we know well and respect, about a possible combination.”

Reed Smith spokesman John J. Buchanan declined to comment beyond the statement.

Reed Smith is the much larger firm in the talks, with nearly 1,900 lawyers in offices in the U.S., Europe, Asia and the Middle East, including about 271 in its Downtown offices. Pepper Hamilton is about a quarter the size, with 515 lawyers worldwide, including 34 in Pittsburgh.

The combined firm would have revenues of about $1.5 billion — Reed Smith brought in $1.12 billion in 2015, while Pepper Hamilton reported $388 million — and would be among the largest 25 firms by revenue in the U.S.

Reed Smith’s move to grow follows its loss of financial services litigators in recent weeks to McGuireWoods, a rival firm that has opened an office in San Francisco to help technology firms navigate financial innovations. Bloomberg reported on April 4 that Richmond, Va.-based McGuireWoods had tapped a total of 10 Reed Smith lawyers over two weeks.

In January, Reed Smith laid off 45 attorneys and an undisclosed number of support staff across all its offices. It did not say if employees were let go in Pittsburgh.

Given the departures, it’s not surprising the firm would be looking to expand, said Jacob Rooksby, an assistant professor of law at Duquesne University. “I see this as a way of recalibrating and picking up some new practice groups,” Mr. Rooksby said.

Several hurdles could trip up a merger, including surveying all offices and practices to see what work would become duplicative or in conflict with each other. Sometimes, a combined firm might have to stop doing a certain kind of service, he said.

But large firms are placing great emphasis on efficiency, which is largely measured in profits per partner employed.

A competitive rush for greater geographic reach and more practice areas has driven a wave of law firm mergers over the last several decades, said Douglas M. Branson, a law professor at the University of Pittsburgh. Topics that used to be under specialized boutique law partnerships now fall under gigantic firms.

“They want to serve a client that has an intellectual property problem in California and serve a client that has a tax problem in New Jersey and serve a client that has a government problem in Washington, D.C.,” Mr. Branson said.

From Pepper Hamilton’s perspective, there could be good and bad from a deal with a significantly larger firm. On one hand, it would dramatically expand Pepper Hamilton’s footprint and give the firm access to Reed Smith’s clients, said Mr. Rooksby.

At the same time, rates for lawyers at the smaller firm tend to increase to match the larger firm’s rates, which could turn off some longtime clients.

Reed Smith acknowledged, “There remains a significant amount of work to do with Pepper Hamilton to assess those benefits and before any transaction would be ready to bring to the Reed Smith partnership.”

Reed Smith’s major areas of practice include energy & natural resources; life sciences & health; financial; and media & entertainment. Last December, it sent a delegation to the Paris climate talks to advocate for actor Sean Penn’s reforestation efforts.

Pepper Hamilton’s largest practices include health-related litigation, including the defense of pharmaceutical and medical device manufacturers in product liability litigation.

In its own statement, Pepper Hamilton described the talks as in the early stages that will “require a substantial amount of additional consideration on our part before we are prepared to bring this transaction before the Pepper partners for full consideration.”

Daniel Moore: dmoore@post-gazette.com, 412-263-2743 and Twitter @PGdanielmoore.

First Published: April 12, 2016, 3:28 p.m.