Ashurst Morris Crisp and US firm Latham & Watkins called off their merger talks last Friday (26 May) after deciding it would be too difficult to combine the two firms’ strong cultures.
Management at the two firms told Legal Week that after considerable partner consultation they found that the risks associated with a merger outweighed the anticipated benefits.
Ashursts said it will continue to look for a US merger on the right terms — but Lathams, which is in the process of building up its London office, said it is ruling out a merger for the short- to mid-term future.
Lathams’ New York-based executive committee member Bill Voge, said: “We each came away with the feeling that
there were a lot of differences between us and, even though it could create a very strong US-UK integrated firm, we decided last Friday not to enter formal talks. Neither of us were convinced that the benefits of the enlarged firm outweighed the risks.”
The preliminary merger talks began in earnest in February and sources at Ashursts said the two firms were initially working towards a formal merger announcement at the end of April. But as the talks dragged into May, it became clear that the partners at the two firms had concerns that could not be dealt with swiftly.
Ashursts senior partner Geoffrey Green told Legal Week: “To create something new like this is very difficult. It requires a lot of change and flexibility on both sides and we have to make a judgement about whether people can make that change.”
He said the firm would not shy away from exploring other tie-ups as the rationale for a US merger — to offer European clients US and UK law capability — remained.
Ian Nisse, Ashursts managing partner, added: “We are well prepared to make changes to take advantage of opportunities. We are not prepared to completely turn ourselves inside out to do something.”
Since February, the two firms have committed significant fee earning time to ensure partners from different practice areas met up to discuss what they would get out of a merger.
It became clear that partners from both firms had concerns about a range of issues including the clash of cultures, management styles and compensation systems.
Ashursts is proud of its strong collegiate work culture that it argues encourages entrepreneurship, creativity and long hours. Lathams has an equally strong partnership culture, having lost only half a dozen partners to rival firms in its 70-year history.
The future headquarters of the firm was also an issue, with the US firm posting fee income of £363m for the last financial year, while Ashursts recorded a 24% increase on last year’s figures, bringing it to a fee income of in the region of £130m. Voge said: “Neither firm could envisage being acquired.”
He added: “The issue we continued to stumble on was as you combine two very different law firms in the way they do business, which of the multitude of systems do you take and which ones do you disregard?”
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Published: 01/06/2000 00:00
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