By Casey Sullivan

Jan 11 (Reuters) - Merger discussions between the large New York law firm Pillsbury Winthrop Shaw Pittman and the smaller Washington firm Dickstein Shapiro have ended, according to three sources familiar with the matter.

Leaders from the two firms pursued merger discussions and exchanged financial information in several meetings over the past two months, but the talks ended on Thursday, according to the sources.

One person familiar with the talks but who requested anonymity said that "conflicts of strategy" scuttled negotiations. "The finances indicated that one firm's strengths were in one (practice) area while the other firm's strengths were in another," the source said.

The merger discussions had been proceeding quietly. Two partners from Dickstein and two partners from Pillsbury were unaware of the details of the talks when contacted on Friday by Reuters. One Dickstein partner said that at a partners' meeting in mid-December the firm's leaders had acknowledged that Dickstein had engaged in discussions with Pillsbury.

A Dickstein spokeswoman declined to comment on what she called "rumors" and said that the Washington firm is "optimistic about our model and our future, and plan to continue with our strategic focus of targeted growth in our highly regarded, premier practices."

A Pillsbury spokesman and the firm's chairman Jim Rishwain, did not respond to a request for comment.

Pillsbury, with 615 lawyers, and Dickstein, with 340 lawyers, initiated talks at a time when law firms including DLA Piper, Baker & McKenzie, and K&L Gates have grown rapidly through mergers to employ thousands of lawyers worldwide. The firms are attempting to meet clients' global demands and to establish better known brands. 

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