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Actually, I think Wallis is more logical phonetically, but Wallace should be well enough known that it wouldn't be confusing either. This is going a bit off topic now, but I have a student that I read with every day, and he has trouble with the 'older' names like Michael and Richard, not names like Alexis and Lynn, which he's familiar with or are similar to popular ones.

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Like la-petite-rachel said, it's too closely related to Wallis Simpson, the Duchess of Windsor. For that reason, I prefer Wallis for a girl, and Wallace for a boy.