Eversheds merger talks fail to bridge the gap
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6 February 2014
Last week The Lawyer revealed that merger talks between Eversheds and Bristol firm Veale Wasbrough had collapsed.
The reasons given for the breakdown were somewhat non-committal. Veale Wasbrough's chairman Derek Bellew said: "It was decided that the merger would not meet the strategic objectives of either firm and we will not be pursuing further discussions." Eversheds' managing partner, David Vokes, put out a similar statement, saying at the time that his firm remained committed to expanding in the City.
But the Bristol rumour mill has its own version of events. "There is a suspicion that Eversheds dropped Veale Wasbrough," says one Bristol partner. And many others say the news that the merger was off came as no surprise.
Eversheds moved into Bristol in 1994, via a merger with Holt Phillips. Right from the start, Eversheds indicated that it wanted to build up its Bristol presence. The Bristol office now has nine partners and 38 other lawyers.
Eversheds has made a number of senior appointments to the Bristol office over the past year, including a team of five fee earners, one of whom is a partner for its banking and finance litigation practice, and a corporate finance partner who, the firm said, would further develop the range of corporate services it could offer its clients in the region.
But observers say the firm has yet to make a significant impact on the Bristol market. In the words of one local solicitor: "The Bristol office of Eversheds is seen as an extension of the Cardiff practice."
Another comments: "When Eversheds came to Bristol, people here were saying: 'Heavens, Eversheds is here', but the Bristol office lost some good people straight away, including two good, solid commercial practitioners."
Eversheds is reportedly having trouble attracting hard-hitters to Bristol, particularly in the company/commercial arena, and many believe it needs to merge to build its critical mass.
Guy Stobart, managing partner of Burges Salmon, says: "A firm that is looking to merge, does so because it is not able to do something organically and needs the assistance of someone else."
Therefore the news that Eversheds was in merger talks with another Bristol firm came as "absolutely no surprise" to local firms, who say they always perceived Eversheds' strategy as being to go for another merger.
Had it been successful, the merger would have been Eversheds' fourth major merger in the past 18 months. During that time it has swallowed Newcastle firm Wilkinson Maughan, Cambridge firm Palmer Wheeldon, and more than half of Frere Chomeley Bischoff, including the firm's Paris and Moscow offices.
The firm's choice of potential mate for its Bristol merger, though, did come as a surprise to some.
Veales is respected in the region and, according to competitors, has a "very reasonable market position". It has a very strong niche educational practice and a strong public-sector emphasis, which could be attractive to Eversheds. Veales would also have given Eversheds a good location in Bristol.
But the 23-partner Veale has been hit by a spate of high-profile departures. In March last year, the firm's top employment lawyer, Chris Southam, left to join Hammond Suddard's London office. Then leading corporate partners Nigel Campbell and Stuart Whitfield quit for Bevan Ashford last August. Highly rated employment partner Sarah Lamont soon followed, taking with her an associate and two assistants.
A local lawyer comments: "We could not see why Eversheds would want to merge with Veale Wasbrough. Veales has got a mix of people. Some areas are obviously compatible, but there are bits, such as family and plaintiff union work, which one would not expect to fit in well with Eversheds.
"We always thought it was a cultural mismatch. Eversheds is seen as fairly hard-nosed, quite commercial and prepared to be tough in search of its objectives. Veale Wasbrough is seen as more people oriented - it has an Investor in People accreditation, for instance. It is more soft and fuzzy around the edges."
But another local lawyer says that there was a benefit in such a deal for Veale Wasbrough because it could have used Eversheds' profile to build business."
Now that the merger talks have broken down, local lawyers see Veales as having two options. "It is difficult to see where Veales will go from here. It has still got a decent client list and remains very busy. It could become a very respectable downsize niche operation. Otherwise it has to look at a merger," says one.
Veales' managing partner, Simon Pizzey, is giving little away. "We keep under review the possibility of a merger and we do on occasions have talks with other firms," is all he will be drawn to say.
He adds that the firm is looking to expand its public sector, construction and commercial litigation practices.
As for Eversheds, if its appetite for a merger remains, it will have to find a more compatible mate if it wants to have a greater impact on the Bristol market.