Chadbourne London gets twitchy as WFW merger nears
25 June 2007
28 November 2013
13 December 2013
30 May 2014
2 June 2014
18 September 2014
Watson Farley & Williams (WFW) managing partner Michael Greville and a team of practice group heads flew into New York last week to intensify merger talks with US firm Chadbourne & Parke - talks exclusively revealed by The Lawyer last week (18 June).
Greville and his partners met their Chadbourne counterparts, including managing partner Charles O'Neill, who was re-elected last week with a mandate to continue with his current growth strategy.
While both firms decide whether they can combine to become a global energy and projects market leader, questions have been raised about how the overlapping offices in London and New York will affect partners at each firm.
A source close to Chadbourne says: "People are nervous about how a merger could change the firm in London, particularly in terms of the project finance team. It's a small office with roughly 40 lawyers, while WFW has over 120. There's a concern that Chadbourne may get taken over and lose its brand completely."
Chadbourne has been building up its brand in London and has succeeded in creating a steady client base in the project finance sector with banks such as JPMorgan and Merrill Lynch.
"The firm's much smaller in London [than in the US] but has built up a good name. It's a concern that the reputation that's been built could be consumed by another firm," says one Chadbourne source.
Despite the reservations, the synergies both Greville and O'Neill referred to in The Lawyer last week (18 June) are clear. Chadbourne's offices in Almaty, Dubai, Houston, Moscow and Tashkent will complement WFW's Europe-focused presence in locations such as Hamburg, Piraeus and Rome. In Asia Chadbourne has a Beijing office and WFW has bases in Bangkok and Singapore. If combined the firm would have offices in many of the world's key energy markets.
While Chadbourne is a relatively new player in the UK, having been set up in 1994, it has not been shy in making its presence felt. It was the first US firm to offer lateral partner hires £1m-plus packages in the 1990s.
WFW itself is a young firm, coming into being after former Norton Rose partners Alastair Farley, Martin Watson and Geoffrey Williams broke away to launch the firm in 1982. During that period the firm has built a strong shipping and maritime brand and is now trying to broaden its horizons.
Greville says: "We've been very successful in the shipping and maritime market - it's been a core strength for us. Now the firm has been looking into other areas of growth, such as renewable power, particularly in the wind park sector."
Last month WFW advised Dexia Bank and Dexia Credit Local on the financing of Belgium's offshore windfarm. Greville sees the firm's progress in this sector as significant to the future of WFW.
Until last week the talks had been conducted purely by the highest echelons of management, compounding the concerns of some Chadbourne partners.
A source says: "It's honestly hard to say whether this merger could be a good thing for Chadbourne. It may work very well, but there's definitely been a reluctance of the management to keep partners informed and this hasn't helped people to feel confident about it."
In the US Chadbourne's renewable practice is thriving, boasting clients such as GE Energy Financial Services, Wells Fargo Bank and Fortis Capital Corporation and working on large-scale projects in a number of sectors, including wind and solar.
WFW announced a drop in profit per equity partner, from £419,000 to £398,000, in its recent year-end results. After breaking through the £50m turnover barrier in the 2005-06 financial year, the firm reported a tiny increase, from £53.5m to £54m, for 2006-07. Chadbourne's turnover had an 11 per cent hike this year, up to $254m (£127.46) from $229m (£114.92m).
One of these firms is in the ascendancy. Perhaps Chadbourne's London partners should relax: if Greville is to realise his energy dreams, he needs the merger more than his new US friends.