Clifford Chance pulls plug on Mallesons merger talks
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Revealed: credit crunch blamed as magic circle firm spurns chance to double Asia offering.
Clifford Chance has broken off six months of merger talks with Australia’s largest firm Mallesons Stephen Jaques due to economic conditions.
The tie-up would have made Clifford Chance the largest law firm in Australasia, with more than a thousand lawyers in the region – but the current unpredictability of the global economy has scuppered the plans.
Mallesons chief executive partner Robert Milliner declined to comment directly on the talks, but told The Lawyer: “How and when we move on opportunities will obviously depend on when we think all the relevant planets are aligned.”
The talks revived a deal that was first mooted in 1999, but which broke down in 2000 because Clifford Chance would not accept the entire Mallesons partnership.
This time round it is understood that Mallesons was more amenable to the UK firm’s demands that a third of its Australian partnership be trimmed.
“Clearly we need to understand what long-term changes may result from a resetting of the global market,” added Milliner.
There is broad consensus that the Australian legal market has too many lawyers chasing too few deals, and Milliner, along with others, has said that the firm’s only growth prospects lie in Asia.
Mallesons has around 130 lawyers in its three Asia offices and 1,000 in its home market. Last year the firm brought in a revenue of A$545m (£238.83m).
Around a tenth of that sum was directly attributed to the firm’s Asia operations.
Clifford Chance has around 300 lawyers in the region. The firm recently transferred former UK managing partner Peter Charlton to Asia with a brief to double the firm’s size in the region.
Management at Clifford Chance saw the Mallesons deal as a quick way to do that and an opportunity to differentiate itself from the rest of the magic circle by becoming the law firm of choice in Asia.
Clifford Chance declined to comment.
Read this week’s leader on the Clifford Chance-Mallesons talks here.
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Readers' comments (8)
Anna | 9-Dec-2008 11:13 am
CC Mallesons
Any merger would prove tough in the current climate, but if they had managed to pul it off the results could have been amazing. Mind you, with Clifford Chance keen to cut a load of Mallesons' partners, perhaps bad memories of its disastrous first foray into the US market put it off.
But god knows Clifford Chance needs to do something to pep up its international footprint because the US really doesn't seem to be working for it at the moment.
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O C Osborne | 9-Dec-2008 3:01 pm
Ozzies
That's not news - last time I visited CC's London office, half the associates there were Australians.
Then again, that was a few years ago. They're probably all back at Mallesons now...
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Mike | 9-Dec-2008 3:37 pm
merger madness
A merger between Australians and Brits will never work, too much potential for personality clashes.
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Anonymous | 9-Dec-2008 3:38 pm
merger
CC must be crazy to consider another merger after Roger & Wells. It was a complete nightmare and the firm is still feeling the repercussions now. They would face the same issues all over again.
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Anthony Millbank | 9-Dec-2008 3:40 pm
Last post
What?! Aussies are very similar. Less cultured, obviously, but much better at sport. Similar sense of humour and they all call all males 'mate'. They'd get on like a house on fire.
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Anonymous | 9-Dec-2008 4:05 pm
Not good for Mallesons
Can you imagine being a partner at Mallesons at the moment? You've just discovered that your firm is more than happy to get rid of you. I'd be looking for another job.
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Anon | 9-Dec-2008 5:29 pm
CC v aussies
I wouldn't say that the people who work at Clifford Chance are less cultured that the aussies.
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Anonymous | 9-Dec-2008 10:09 pm
Negative comments
A few comments here from people that obviously don't work at CC. CC is a great place to work and the partners here are more easy going, friendlier and more approachable than in most other places. If the Aussies would have got on with any magic circle firm, it's probably CC.
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