Garretts left hanging as Andersen caves in

Standalone firms desert international network; Tite & Lewis now in the frame

The remains of the Andersen Legal network collapsed this week as the last members that could feasibly operate as standalone practices decided to quit.
To add to the woes of UK member Garretts, the firm was left out in the cold as the accounting and consultancy arms of Andersen UK secured a life-saving deal with Deloitte Touche Tohmatsu.
It is understood that Singapore firm Rajah & Tann, Malaysian member Zaid Ibrahim & Co, Hong Kong firm Kwok & Yi and the network’s newest member, Indian firm Hariani & Co, are all either in the process of extricating themselves from the network or have made the decision in principle to do so.
Along with Scottish firm Dundas & Wilson and Spanish firm Garrigues, these were the firms most attractive to potential merger partners because they already had successful independent operations before they signed up to the network. The managing partner of one of the six firms told The Lawyer: “The network has ceased to exist; we’re now completely comfortable as lawyers that we can extricate ourselves from any links easily.”
Garretts now faces a battle to do a firmwide deal before the best partners start to defect, because it is unlikely that the firm could operate on a standalone basis.
Garretts senior partner Tony Williams told The Lawyer last Friday (12 April) there were still ongoing discussions taking place with potential merger candidates.
An Andersen Legal spokesman claimed that negotiations are in progress with big five accountancy firms and with law firms. A deal with KLegal is highly unlikely, because it is understood that the worldwide KPMG-Andersen tie-up was abandoned by KPMG because it was too difficult to ring-fence the liability of Andersen worldwide partners to US litigation.
A more likely suitor is Ernst & Young, whose legal arm Tite & Lewis is the smallest of the big five. But Tite & Lewis may well prefer to pick off the best partners rather than do a firmwide deal.
Tite & Lewis managing partner Mark Lewis confirmed that merger discussions were underway, but would not comment on the ultimate shape of any deal. It is understood that Manchester and Birmingham partners are still in talks with national firms, including Addleshaw Booth & Co and Pinsent Curtis Biddle, but again Williams will have to bargain hard to secure a deal for all his staff.