BLG chief exec: Clydes deal is no rescue merger

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  • Destroy the competition, I somehow think not. The conflicts will generate a lot of work for other practices in the area and cost-conscious insurance clients will be wary of hiring a "top 10" practice, as they know they will be gouged on fees. Truth is Barlows need this "merger" and their cocky young management is about to get its come-uppance.

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  • "Destroy the competition"? 25% share of supply test triggered?

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  • I disagree with you rival insurance practice @0956.
    For the EC3 firms this deal, if successful, will remove a major competitor for the market in a sector which is already being squeezed by falling fees.
    There will no doubt be plenty of fallout through conflicts and this will present opportunities for rival firms looking for new teams to help them get into the market.
    The insurance sector has for too long be dominated by the sames firms, this should give everyone a shock

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  • In light of the consolidation of the market which is going on it’s probably a good defensive move, but it’s a real shame considering where BLG could have taken the business.
    I question whether having a litigation and insurance boutique is the right way forward. The right strategy would have been to build up a stronger commercial and corporate side because it’s so integral to the way their clients are doing business.
    Both firms have a certain level of work but if you want to do well you have to be going for those high progile City transactions.
    Nobody goes to BLG for any serious insurance merger because they have not got the resources, and they probably would not go to Clydes either.
    Will there be enough litigation to ensure the survival of a merged £300m firm? Maybe not.

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  • BLG could have and should have gone for the US merger, this just looks like a firesale now

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  • They’ve got to bridge that PEP gap, either by making BLG people salaried, or getting rid of them. Because it’s a takeover Clydes would be in a position to sort that out. For Clydes to take out one of their main competitors, get their hands on the professional liability practice and a strong bulk practice, opportunities like that don’t come around very often.

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  • My money would have been on BLG merging with a US firm. You need international offices in order to attract the work, that is one of the attractions of Holman Fenwick. For BLG, too many exits, too few international offices and low rates mean there is nowhere else to go.
    All credit to David Jabbari. If this goes ahead it will be a major coup for the firm and will create a new force in the law.

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  • Wonder who'll be senior partner.....
    Surely this must be Michael's last toot at the trumpet?

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  • David Jabbari's spin never ceases to amaze me.
    Everyone connected with BLG saw the writing on the wall ages ago, and this is emphatic confirmation that the end is nigh. For "pursuing growth strategy" read "salvage from the wreckage of a failed firm".

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  • I'm sure other firms will already be circling for possible hires. Bet BLG's standout practices will be high on the list!

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  • a lot of BLG partners were left totally unconvinced about the Jabba's strategy for saving the firm. Clint gave it a good go, but he moved it too far away from its base. No wonder so many corporate partners left after Jabba pointed out to them that their salaries were dragging the firm down.
    Stripping it back down to focus on litigation and insurance is a good thing, but Jabba has to carry people with him an judging by these comments, he is failing in his task

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  • how and why did this leak?

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  • I can't see how this works for anyone at BLG. Turkeys voting for Christmas anyone?

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  • @Anonymous | 6-Jun-2011 3:35 pm
    I'd like to quote the Beastie Boys to you and say: "It's sabotage!"
    But, seeing the following quotes from BLG this week - which rather gives it away, it seems they may have leaked in order to try and drive this through - i.e. let the media and the market push this one along by presenting the BLG partnership with a fait accompli they cannot escape from.
    Mind you, risky strategy - many BLG partners will simply vote for this for fear of no alternative, keep their heads down, and then head for the exits as soon as the ink is dry. (And then there's the ones who'll be pushed........)

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  • I'm sure Clyde's management will have done their research into BLG's negotiating tactics when they bought Halliwells last year.

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  • With a fiercely independent partnership like Barlows has, there is no way they can be going into this deal voluntarily.
    Clydes is known for its no nonsense stance and in any other market would be considered the venture capitalist in this deal. In other words, come in and take the value and leave others to pick up the rest.
    I think comments regarding Jabba go too far. He has inherited a firm which needs to address its financials. Such a deal, if successful, would be a major coup for any manager working with such a firm as BLG. It is the best option going forward, if this is right, it could be the only option...

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  • This deal is really excellent news for the competitors of BLG and Clydes. Also, latest astrological projections show that the world will end on Wednesday afternoon.

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  • The hard truth is, like it or not, the Jabba is the face of future law firm management. He does not appear to care two hoots about BLG's history or what its staff think. He has gone into BLG and salvaged a business that had lost its way for 15 years. In private equity terms, this merger is a 'liquidity event' for the senior partners of BLG. The future will be all about people like him being able to come into ailing law firms, turn them around and negotiate the best possible exit for the owners of the business. That will be the world of private equity. People who think it is failure not to make BLG a world beater on its own really live in cloud cuckoo land. There are too many dusty old management teams in law firms pursuing the myth that their firm has the right to exist independently for ever. Many of them are in the insurance sector. They should have a look at their clients and ask themselves how many times there has been merger activity involving their key clients over the last 10 years.

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  • Everywhere I look at the moment firms are trying to come to terms with what happened to them during the recession. BLG is no different. A controlling senior equity partnership which earned to much for too little almost drive the firm into the ground. The recesssion enabled the firm to let go of a few of those egos and start to refocus on its core practice of insurance. It may have been too late by then, of course, because the insurance market has contracted, there is less work around. So for BLG the world has changed around it, leaving it wanting to retrench to its core base, except the core base has disappeared.
    The only option left is a merger, and for BLG to have attracted Clydes is a major coup.
    Jabba most certainly is the future face of law firm management, and hopefully everyone, including clients, will be better off for it.

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  • nonsense. Look at how profitable BLG was in the early noughties and how since then Clydes and others have left it trailing. The decline set in long before the recession. The figures and the departures of many quality lawyers, including its best insurance lawyers, tell their own story, no matter how hard apologists for the present and recent management try to pretend otherwise.

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