So, serial merger flirt Salans has been jilted by Kirkpatrick & Lockhart Nicholson Graham after four months of talks. The wonder is that it took Kirkpatrick four months to find out what the rest of the world has always known: the further west in Salans you go, the less you would want to merge with it.
Yes, it has a stellar Russia and Central Asia practice and is solid in Eastern Europe, but it is faltering in Paris, low profile in London and horribly weak in New York.
Further east the firm has had fewer difficulties in acquisitions. It took on the Altheimer & Gray Central Asia offices and picked up Haarman’s Berlin operation. In London there have been talks with Theodore Goddard and Speechly Bircham, but neither City firm thought Salans had a compelling enough proposition. And although Salans has been lusting after a transatlantic merger for an age – preferably with a US firm without European offices – it has remained eternally frustrated.
Unless Kirkpatrick managing partner Peter Kalis is unhinged, there is no way he would have been attracted to Salans’ US end. And Kalis is anything but unhinged. His imperative is that Kirkpatrick should expand onto the Continent; no wonder the prospect of a ready-made European business was superficially attractive.
But oh, what a headache it would have been after the merger. Kalis would have had to take a sledgehammer to Salans’ New York office, while its assortment of litigation-based practices in London would have taken years to gel with Nicholson Graham & Jones’s legacy business in mid-level corporate and property. Paris has a certain brand heritage, but it is a spent force. In any case, such is the the state of the French market that it is now easier for expansionist US firms to pick up partners from the vast number of disintegrating Paris boutiques.
Not that Kirkpatrick would shy away from a bit of bloodletting, mind. The firm’s guaranteed levels of payment to UK partners finishes in January 2007, when the two-year integration period comes to an end. From next year the modified lockstep will be abandoned and UK partners will be remunerated on the same basis as their US colleagues – purely on a merit basis. It is highly likely that a fair few London partners will see a drop in drawings.
By rejecting a merger with Salans, Kirkpatrick has avoided serious turbulence. But the London partners had still better fasten their safety belts.