Hammonds to seal transatlantic merger with Squire Sanders
Hammonds is the latest UK firm to eye a US merger, after announcing it is in talks over a potential tie-up with Cleveland-headquartered Squire Sanders & Dempsey.
Peter Crossley
Squire Sanders chairman James Maiwurm and Hammonds managing partner Peter Crossley said the firms are holding preliminary discussions in a move that would create a global firm with revenues of more than £400m and 1,300 lawyers.
The firms’ partnerships will vote on the merger before the end of the year, with the merger expected to go live on 1 January.
“While we’re still at an early stage, our discussions to date indicate that such a merger would appeal strongly to clients that want high-quality legal services from lawyers who have global experience and who understand and respect client demand for value,” said Maiwurm.
He added: “Squire Sanders is committed to being a global firm. We need a more complete presence in the UK and Western Europe to complement our strength in Central and Eastern Europe. Hammonds has a well-developed platform that would complement our presence in Europe, would add to our capabilities in Asia and would enhance Squire Sanders’ broad-based Latin America resources.”
Squire Sanders has 32 offices in 15 countries, while Hammonds has 10 offices in six countries, including four in the UK. Both firms currently have bases in Beijing, London, Hong Kong and Brussels.
Last month, Hammonds reported a 6 per cent fall in revenue to £117.8m in the 2009-10 financial year, while in the same period average profit per equity partner rose by 32 per cent to £364,000, and net profit rose 17.1 per cent to £22.6m. Squire Sanders posted global revenues of $545m (£353m) in 2009.
Crossley added: “Operating as one firm around the world is a foundation of the Hammonds culture which is shared by Squire Sanders. There’s an obvious cultural fit between the two firms.”
Squire Sanders is believed to have been a eyeing a UK merger for several years, and in 2006 was reported to be in advanced talks with fellow US firm Bryan Cave.
The firm launched its City office in 1992, but with only 32 lawyers based in the capital, including 11 partners, it lacks the strength of many of its US rivals. In May it lost two high-profile partners to US firm McGuire Woods in the shape of former managing partner Andrew Visintin and corporate partner Philip Newhouse (11 May 2010).
The talks are the latest transatlantic merger discussions to take place this year. In June partners at US firm Sonnenschein Nath & Rosenthal and Denton Wilde Sapte voted in favour of the firms’ merger, which is due to go live on 30 September (9 June 2010), while SJ Berwin is also believed to be in advanced talks with Proskauer Rose (12 July 2010).
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Readers' comments (17)
Anonymous | 26-Aug-2010 9:40 am
Is this a wind up?
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Anonymous | 26-Aug-2010 9:47 am
Great move by Hammonds.
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Anonymous | 26-Aug-2010 10:00 am
Hammonds - how have you pulled this off! You do realise the yanks will eventually kick all the legacy London partners out and replace with utter tripe before packing the bags and buggering off!
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Rhubarb & Custard | 26-Aug-2010 10:58 am
From an outsider's point of view this looks like a great deal that makes sense for both firms. They both get what they want. The only negative thing is the tedious carping that such deals inevitably generate from partners at rival firms.
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Anonymous | 26-Aug-2010 11:11 am
The minute Squire Sanders do their DD they will run for the hills. This is a sick firm in terminal decline.
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Anonymous | 26-Aug-2010 11:17 am
As an international firm it is going to struggle and the project smells of hubris and over-reaching on all sides. It will have lots of offices scattered across the planet with a small number of people sitting in each one of them outside of the larger offices in the UK and US. If you aspire to offer substantive global legal advice to a sophisticated multinational then you need to match that with the people on the ground. With combined revenues of barely £500m, this proposed firm is not going to have the scale and depth of capital and resources to compete. With a $200k difference in PEP and a 2:1 disparity in revenues between Hammonds and Squire Sanders a partner in Birmingham is going to be seriously questioning why this is the sensible thing to do.
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Anonymous | 26-Aug-2010 12:28 pm
Stand up if you would rather merge with Halliwells! Oh no too late for that. Might just resign instead!
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Sam Cam | 26-Aug-2010 12:33 pm
What else could Hammonds do anyway? This isn't a good deal particularly but at it buys them a bit of time and Squire Sanders won't bother trying to sort out Birmingham or Leeds as it's too much hassle immediately. Well done Peter Crossley for making the most of a bad hand.
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Parsley the Lion | 26-Aug-2010 12:36 pm
Not a merger. It's SSD buying a UK firm a third of its size. Although the synergies on the Tallahassee-Dominican Republic-Leeds axis are of course not to be sniffed at.
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Anonymous | 26-Aug-2010 12:39 pm
@ Anonymous (26-Aug-2010 11:17) - Of course the combined firm will still be sub-scale in the medium term, but that is hardly an argument against a merger.
We are rapidly heading towards global law firms of the scale of the big accountancy firms, with $25 billion revenues.
The firms which face the bleakest future are those which, for cultural and other reasons, are seemingly incapable of merging, such as Macfarlanes and Travers Smith.
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