By Abigail Townsend.The merger between Australian firm Mallesons Stephen Jaques and
CliffordChance is off, according to a senior lawyer at the City firm.Stuart Popham,
global head of finance at Clifford Chance, tells The Lawyerthe talks have ended because
the firms could not agree on the structure ofthe merged practice.He says: "We had
discussions with Mallesons, as we do with firms, and wehave concluded these negotiations
because we cannot agree on thestructure."The failure of the merger talks will be a
significant blow to CliffordChance. Its merger with US firm Rogers & Wells and planned
merger withGerman firm Punder Volhard Weber & Axster makes it the largest law firm inthe
world with more than 2,600 lawyers.The addition of Mallesons, Australia's largest
practice with 870 lawyers,including 191 partners, would have considerably increased its
standing inAsia and the Pacific Rim.Mallesons is officially keeping silent regarding
Clifford Chance. But asenior source at the firm claims Popham has got it wrong. He
believes thetalks are still on but declines to comment further.The two firms had been
in talks since last year. But the negotiations weremarred by structural issues. It is
understood Mallesons suggested eithersplitting into a two-tier national and
international partnership ormanaging Clifford Chance's Asian operations on a
profit-sharing basis. Itappears Clifford Chance is not prepared to accept either
proposal.A partner at a rival Australian law firm is not surprised the talks
havecollapsed. He believes Clifford Chance was only ever interested inMallesons' banking
division.He comments: "I had heard that the last proposal that Mallesons had puttogether
had not been warmly received. I can understand Clifford Chancesaying 'We are more than
happy to merge with the A team in banking but dowe really want the B team in, for
example, insurance as well?' Australianfirms are less narrowly focused."Popham says
Clifford Chance is not talking to any other Australianpractices but is keeping a close
eye on the market.He says: "We will always be looking to make sure we are providing
theright service in Asia. We are keen on the area and think the economy
isrejuvenating."We are not short of lawyers [in Asia] but maybe in time we will need
toimprove the situation. We are very much keeping an eye on it."see news analysis, page
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