Howard Kennedy chief: FSI deal is still on track

The initial live date of 1 November has been passed without an official launch, but Dembovsky has reiterated that there is no significant hitch in the process (19 October 2012).

One former partner told The Lawyer that there was an “uneasiness” among some people at the two firms as they try to reach a new members agreement and suggested the firm was looking at trimming “passengers” from the partnership.

However, Dembovsky stated: “We’ll look at numbers and how different teams work, because in the current environment we’ve got to be more cost effective and profitable. But there’s no sense of a need to move people on.

“There’s no delay in the process. We gave ourselves a tight timetable and there are a number of issues we are working through.

“We need to devise a new members’ agreement and make sure our terms of business are the same. There’s no difficulty or controversy – it just needs to be done.”

Another ex-employee suggested that a clash over working practices could be slowing down the £45m tie-up, commenting that Howard Kennedy’s traditionally tight-knit equity partnership may be reluctant to open up and embrace FSI’s open-plan offices.

The source said: “Mark Dembovsky has fought to get the partners to spend some money on making the reception and meeting rooms better, but that was very much on a shoestring. They’re old-fashioned with no air conditioning and little has been spent on furniture and equipment.

“Many of the Howard Kennedy people are used to having their own individual offices, whereas FSI is open plan. Although these may seem like minor issues, it could be a source of conflict.”

But Dembovsky said the Howard Kennedy equity partnership had been clear prior to signing the heads of agreement that open-plan working was not a ‘deal-stopper’ and that they were willing to give it a go.

He said: “We’re trying to get the majority of people into the FSI space. This will be a test to see if open-plan working is the right way forward. People will learn a different way of working, but this isn’t a barrier to making the merger work.”

The merger is being led by Dembovsky and FSI managing partner Paul Millett (8 August 2012).

Another integration meeting is scheduled for next week as back office functions such as finance policies and HR, and the website and logo are progressed. The two firms hope to announce a re-scheduled live date shortly.