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Eversheds London and Frere Cholmeley Bischoff are in merger talks that could save Frere Cholmeley from debt and allow Eversheds to both double its size in the capital and gain a Paris office.
Questioned by The Lawyer, the two firms issued a joint statement confirming that they 'are holding discussions to explore a possible merger. No decision has been made. No timetable has been set.'
Discussions had not yet reached the stage where proposals could be put to each partnership, they said.
If all 42 Frere Cholmeley's partners are taken into Eversheds, the London office would have 100 partners, bringing it into the top dozen City firms by size. Eversheds, which up to now has had only a Brussels office, would gain Frere Cholmeley's seven-partner Paris office as well as one in Monaco and associated offices in Moscow, Rome and Milan.
The merger talks comes at a good time for Frere Cholmeley. Earlier this month it announced to staff that it would be moving but did not say where or when. Its landlord JP Morgan has paid it a lump sum to move out of its three floors on John Carpenter Street, EC4, so that the bank itself can use the space.
This will have brought down the amount of Frere Cholmeley's bank debt, believed to be about £12m last year.
In the five years since Frere Cholmeley merged with Bischoff & Co, the number of partners has dropped by a third from 63 to 42 and fee earners from 213 to 146. The firm ran into debt in 1994 and 1995 when it had to pay to close its foreign offices in Barcelona, Berlin and Brussels and then Dubai in January 1996. Many of these had not been making much money in the first place.
Since then the debt has slowly been coming down but it is taking a long time. Any partner wishing to leave has to contribute to his or her share of the debt. Frere Cholmeley has been keen to find a merger partner that could remove the debt.
Eversheds 56-partner London office, effectively founded when Jaques & Lewis merged with the national Eversheds network in 1995, has been seen as too small to make an impact on the London corporate market, despite taking 11 partners from Waltons & Morse in 1996. The office's managing partner, Peter Scott, has long had a strategy to increase its size.
Eversheds will also be keen to gain some of Frere Cholmeley's clients. Frere Cholmeley is particularly strong on the property, media and private client side. It does McDonalds' property work and advises Time Warner and Elton John.
An additional attraction for Eversheds is Frere Cholmeley's long-established Paris office. Eversheds appointed French lawyer Olivier Morel to head a 'French desk' in London last September but has been keen to gain a presence in France.
Alan Jenkins, Frere Cholmeley's managing partner, said: 'It is not true that our financial position, which is strong and stable, has anything to do with our discussions with Eversheds.'