Hammonds, Squire Sanders win 90 per cent backing for merger
The partnerships of Hammonds and Squire Sanders & Dempsey have voted overwhelmingly in favour of its proposed merger, which will go live on 1 January 2011.
Peter Crossley
More than 90 per cent of the firms’ partnerships voted for the tie-up, which will create a 1,275-lawyer firm with a turnover of $625m, putting it on course to break into The Lawyer’s top 50 international firms by revenue.
As reported by The Lawyer last week, the combined practice will operate under the Squire Sanders & Dempsey brand in the US and Eastern Europe, while in the UK, Europe and Asia it will be known as Squire Sanders Hammonds (4 November 2010).
The new firm will be led by Squire Sanders chairman James Maiwurm, who takes on the role of global chair and chief executive officer. Hammonds managing partner Peter Crossley has been named Europe managing partner and New York-based Squire Sanders partner Howard Nicolas will become managing partner for the Americas and Asia Pacific.
The new firm’s global board will also include four Hammonds partners and six from Squire Sanders. The Hammonds representatives are London-based partners David Hull and Robert Weekes, Madrid partner Rafael Alonso and Leeds-based Jonathan Jones.
The firm will operate under a Swiss Verein structure similar to other transatlantic unions including Hogan Lovells and SNR Denton. Crossley told The Lawyer that within a year of going live all the firm’s lawyers will work under the same merit-based remuneration system.
Crossley said: “All partners will be assessed on the same basis, which means everyone’s singing from the same hymn sheet and remunerated on the same basis across the entire firm. That’s something that distinguishes from one or two other combinations.”
Commenting on the result of the vote, Maiwurm told The Lawyer: “It shows that both firms’ partnerships are aligned and that we can move forward confidently, knowing we’re united and that this is something both firms really want.”
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Readers' comments (11)
Anonymous | 9-Nov-2010 12:10 pm
This deal does not set pulses racing - 2 mediocre firms combining to create a larger even more mediocre firm. For Hammonds, capitulation. For SSD, biting off more than they can chew. Financial integration or not, did they really do their dd on this one? Oh dear.
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Anonymous | 9-Nov-2010 1:00 pm
@ Anonymous - that sounds like very wishful thinking from a partner in a smaller law firm that is incapable, for cultural and internal political reasons, of merging or even opening overseas offices.
Neither Hammonds nor Squire Sanders are true elite firms, but so what? By definition, at any one time only a tiny proportion of firms are. The conclusion that a merger is therefore not in these firms' interests is incoherent, it actually means that they have more to gain and less to lose from such a combination.
Law is just like every other industry, there are economies of scale. The trend is inexorably towards larger, more global firms and it is accelerating quickly. In the not so distant future there will be law firms of the present size of the Big 4 accountants.
Firms which choose to stand on the sidelines and sneer during the consolidiation process will end either completely irrelevant or out of business.
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Anonymous | 9-Nov-2010 2:27 pm
I agree with Anonymous 1.00pm. Hammonds seems to get criticised whatever way it goes. Do nothing or make a bold move. This merger is a bold move which fundamentally changes Hammonds position in the UK market. Maybe some of its national rivals might want to look at more creative moves in the international field than simply the standard 'non-exclusive' best friends relationships which don't seem to go anywhere.
Whether this merger will work no idea - but both firms have a lot to gain and frankly little to lose.
A good deal in my opinion.
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Anonymous | 9-Nov-2010 3:02 pm
I am a partner at a rival national firm and I think this merger makes complete sense for Hammonds. Its a good firm with a strong client base and will benefit from this union. I wish the firm well. Competition is healthy for everyone.
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Anonymous | 9-Nov-2010 4:29 pm
It will be, presumably, rather like the Hammonds Suddards merger with edge ellison (or was that a take over?) back in 2000. Once again, the larger fish will swallow the smaller whole and slowly dismantle its inner workings. I just wonder if the larger fish will catch fin rot.
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Dan | 9-Nov-2010 4:37 pm
Anonymous (12:10) sounds like one of many people in the legal profession who need to get their heads out of the sand and understand he world is globalising and changing at a remarkable speed.
ALREADY there are mainland Chinese law firms expanding overseas, King & Wood for example now has two offices in the U.S., as well as one in Tokyo.
For virtually all law firms the next decade will be a case of merge or die.
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Anonymous | 9-Nov-2010 4:59 pm
I worked for A V Hammond circa 1987 when they were a medium sized regional firm in Bradford. Exciting things happened over the next 10-12 years and they became a high profile national firm with an excellent Client base and they were good employers. Now they have become globalised - what next?.... the Universe. I wish all my ex-colleagues success with the new venture
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Anonymous | 9-Nov-2010 11:30 pm
I agree with Anonymous at 12, and not at 1.00. This is a case of 2 decent, but mediocre, firms merging for no very good reason. Why? Has any client come out and said "brilliant, this is what we want?" If they do, fair enough, but why does Hammonds, with no US practice to speak of, want to merge with a US firm that is not a market leader in its own jurisdiction? Does Squire's have such a volume of business in the UK/Europe that it needs a partner? No one has suggested they do.
Hammonds have overseas office but so what, so does everyone else, even Nabarro. It's one thing to set up foreign offices, another to make them profitable to a merged, global practice.
The second point is one made by "Dan". But why on earth would any decent PRC lawyer join this merged firm? For a start they'd probably loose their local licence to practice - as they would be deemed to practice US/UK/HK law, and not PRC law- and what PRC practice do these merged firms think they will pick up? Fine if embryonic PRC lawyers in US Universities want to join, but this this likely? If you were a smart, young PRC lawyer, why would you join this second tier outfit? What would you learn? It's rather like Norton Rose, very ambitious, talk up the press, but no decent, politically connected PRC lawyer will join - at least in numbers. They'll go to a magic circle firm for a couple of years, or a US firm in New York, and then go and set up their own practice, and who would blame them.
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Anonymous | 10-Nov-2010 6:55 am
A law firm has as its primary asset its people. As such when there is a combination the success or failure hangs on the ability of the people to integrate and get on. From what I can see these two firms have no synergies. Squires Sanders makes the mistake of thinking it is a good firm because it hits its mediocre budget targets. Hammonds at its core has a chippy Northern culture that DLA got rid of some time ago. This merger compares with the acquistion by firms of the Haliwell's rump. Squires thinks they can ring fence liabilities and hope for the best. Squires does not have a strong enough management to handle this. This will end in tears.
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Martin B | 10-Nov-2010 11:35 am
It appears that Anonymous (9-Nov-2010 11:30 pm) has made a very long reply without having even read the previous comments properly.
Re his point about clients, were the customers of, say, Glaxo Wellcome crying out for it to merge with SmithKline Beecham? Law firms are businesses and are not run by their clients but by their own managements.
However I can see no way in which client service will suffer from the merger, and plenty of ways in which it might be improved.
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