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Manches is close to sealing a merger with private client firm Penningtons in a move that would create a £60m firm of roughly 250 lawyers.
Insiders say Manches has been scouring the market for a merger partner for months and is now in the final stages of talks with Penningtons. According to sources, partners have been asked to sign a lock-in agreement this Friday (27 September).
Both firms confirmed that they had been speaking to each other with a view to a merger. Manches Thames Valley managing partner Richard Smith said: “I can confirm on behalf of all the Manches offices that we are in discussions with the management team at Penningtons concerning the possibility of a merger between our two practices.
“It has been agreed by both firms that these talks are being undertaken on a confidential basis. We are therefore not currently in a position to make any further public comment on their likely outcome.”
Sources said partners had been given until Friday to agree to a lock-in deal, preventing them from leaving the firm should a merger go ahead.
If the firms combine then it would lead to a business of around 115 partners across 8 UK-based offices. Both firms have recognised synergies in their real estate practices, private client and family work with Manches head of Thames Valley’s private client practice Anne Burnside having previously worked at Penningtons.
A market commentator said news of the talks come as no surprise, given the pressure Manches has been under to reboot its financial growth.
This pressure has been particularly strong since its failed 2009 merger talks with Halliwells, a long way off pre-2008 Manches when a constant workflow underlined the firm’s financial growth. At the end of the latest financial year Manches net profit fell to a 10-year low, dropping by 42 per cent from £3.7m to £2.15m, while average profit per equity partner (PEP) fell below £200,000 for the first time since 2004/05.
The year saw family law star Helen Ward exit for rival Stewarts Law in September 2012 (19 September 2012). Understood to have been one of the biggest billers at Manches, Ward was the fifth partner to make the journey to Stewarts in around three years.
Meanwhile South-East firm Penningtons saw its revenue hold steady in 2012/13, rising from £32.3m to £32.5m.
This followed on from the previous year’s 35 per cent turnover increase on the back of a double merger. The firm merged with St Alban’s firm Wedlake Saint and Lincoln’s Inn outfit Dawsons (3 May 2011) that year, adding 10 to the partnership and replenishing the net losses of the past six years.
Both firms declined to comment on whether partners would be subjected to a lock-in.