Mayer Brown courtship of Simmons founders
US giant undeterred by failed talks as search for City ally continues
Mayer Brown has been in secret merger talks with Simmons & Simmons as the Chicago-headquartered firm looks at ways of bolstering its dwindling presence on the UK side of the Atlantic.
It is understood that the two firms held talks, which have now been aborted, over the possibility of creating a £1bn global business that would have gifted Mayer Brown more UK and European coverage and extended Simmons’ reach in Asia.
Simmons, which is to open a Chinese ’hub’ in Beijing this year (The Lawyer, 31 May), is targeting growth in that emerging market, where Mayer Brown has a substantial presence through its 2008 merger with Johnson Stokes & Master.
“China’s right at the top of the list. The US is a big issue and we’ve thought about [that market] on and off for a decade,” commented Simmons managing partner Mark Dawkins.
Pointing out that it is firm policy to refuse to comment on merger talks, Dawkins added: “We have a clear strategy that works for us. We’re not blind to what’s happening in the market.”
Despite the fact that discussions with Simmons were unsuccessful, Mayer Brown is thought to be continuing to pursue a City union, with sources citing the catalyst as disappointment about the growth of the London office that it acquired in 2002 as a result of the tie-up with Rowe & Maw.
The firm signed up for 220,000sq ft of new office space at 201 Bishopsgate in 2007. One source close to the firm confirmed that the real estate deal was ”predicated on a business plan to increase growth in London by 70 per cent”.
“It hasn’t had growth of 70 per cent; in fact it’s probably gone down,” the source added.
While Mayer Brown’s 2009 global average profit per equity partner figure of $1.05m (£726,000) was higher than the £520,000 posted by Simmons in 2008-09, Mayer Brown’s UK office experienced a 28 per cent fall in revenue last year to $146.3m. This was one of the largest drops for any US firm in London last year.
News of Mayer Brown’s merger quest comes after US firm Sonnenschein Nath & Rosenthal and UK counterpart Denton Wilde Sapte asked their partners to approve a September merger.
Hogan & Hartson and Lovells completed their transatlantic merger at the beginning of May.
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Readers' comments (35)
Anonymous | 7-Jun-2010 11:12 am
Ten years on and history repeats itself. Mayer Brown merged with Rowe & Maw to solve a problem with a loss making London office. Its problem then, as now, is that the Chicago power brokers did not and still do not understand the London legal market. Some of the decisions made by the firm in relation to its London office over the past three years have been tantamount to pressing the self-destruct button. Few who have gone from the firm in that time will have any sympathy for its plight, and one can only assume that the CVs of the remaining decent lawyers in London office are already doing the rounds.
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Anonymous | 7-Jun-2010 12:37 pm
Rowe & Maw was a good merger partner, but London and the New York office of Mayer Brown Rowe & Maw needed building up quickly and in the good years after the Rowe & Maw merger. Without strong London and New York offices international would not work. Lateral hires in London were expensive and not good value for money. Top New York talent walked out some years ago. Partner cuts destroyed ethos and morale.
The deal with Johnson Stokes & Masters was "inspired". It was the time to go forward strongly, but then came the cuts and the Paul Maher exit.
It was said at the time of the Rowe & Maw merger that Chicago heavy-weights doubted its merits and even voted against. Now Chicago (Mr Krueger which way did you vote?) finds itself internationally invested but without the weight it needs in London or New York. They need an even bigger strategic review than the Pru!
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Anonymous | 7-Jun-2010 2:53 pm
Pity, this would have been a great merger for both firms.
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Anonymous | 7-Jun-2010 3:53 pm
US-UK is clearly the way the market is going at the moment and more than likely will accelerate over the coming months. This might just prove to be a missed opportunity for both firms.
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Anonymous | 7-Jun-2010 4:26 pm
Any guesses as to who will be next?
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Anonymous | 7-Jun-2010 6:04 pm
How about Gibson Dunn and Macfarlanes?
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Anonymous | 7-Jun-2010 10:44 pm
Paul Maher's exit from Mayer Brown last year was a cataclysmic event in the firm’s illustrious history.
The firm's London presence has experienced tough times ever since Paul's departure. There has been a partner exodus, profitability has slumped and the firm has lost key clients. These merger talks, if true, represent a pathetic cry for help and are indicative of the firm’s dwindling presence.
The firm heralded its own demise in ousting Maher. The very man, who, by virtue of his vision orchestrated the legal world’s most infamous merger and played an irreplaceable role in building Mayer Brown to the firm it was before he left, is the same force that is and will lead to the firm’s dramatic fall from grace. The void created by Paul Maher’s departure is something the firm will never recover from; Mayer Brown’s management committee is well aware of this and rueing their misjudgement.
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Anonymous | 8-Jun-2010 9:26 am
Mayer Brown is a tarnished name. The heavy hitters have gone, the remaining partners are sitting ducks. Why would any decent firm want to merge with them?
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Anonymous | 8-Jun-2010 9:34 am
It's easy to see what Mayer Brown is up to. They've lost their key talent. They can't afford to 'restructure' what is left of the London partnership -because it would have nothing left if it did - so Mayer Brown is seeking a merger so that it can kick them out once the ink is dry.......
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Anonymous | 8-Jun-2010 9:48 am
*yawn*......
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