All good things come to those who wait – no doubt a cliché Ashursts and Fried Frank are all too aware of. Being the focal point of one of the most gossiped about mergers since… well, Ashursts and Latham & Watkins, is probably distracting and not a little annoying.
The legal community is fascinated by the prospect that Ashursts could make this one work. Among the whispers, lawyers have been predicting that a tie-up will never happen. This is not least because the discussions seem to have been dragging on for an eternity: speculation began bubbling in early summer, reaching fever pitch around September time. The reality is that full discussions only really began in earnest during the fourth quarter. Added to this is the point that seems to have been forgotten in the midst of all the hysteria: this really would be a merger of equals.
Ashursts has 142 partners and Fried Frank 136. In terms of profits per partner, the UK lawyers banked £600,000 last year and those in the US £563,000 in 2001. This is not a situation where one larger firm is taking over the other, potentially having the power to impose its will on the target.
Clifford Chance was a much bigger firm when it hooked up with Rogers & Wells; and let's face it, it needed that clout to persuade the US firm to change to lockstep – with a few notable exceptions, of course. At the other end of the scale, 46-partner Titmuss Sainer Dechert dumped lockstep to eat what it killed when the 168-partner Dechert Price & Rhoads went for a merger. There are anomalies – Mayer Brown & Platt stood up and took notice when Rowe & Maw laid down its conditions for a 'combination'. And indeed there is Hobson Audley and US firm Faegre & Benson – although to be honest, I'm not sure what that was.
Anyway, true equality does present a myriad of problems – namely, keeping things equal once a merger goes through. And not just between the two firms on issues of management, but also between the partners themselves: who gets what once the remuneration conundrum is ironed out?
In short, it makes for a political minefield. But taking time to navigate their way around explosive issues shows that Ashursts and Fried Frank are committed to creating a firm that can compete with the best in private equity, corporate and structured and leveraged finance. The only stumbling block is leaving partners out of the loop – a lack of communication, especially on a project this important, must be frustrating. But Ashursts and Fried Frank are playing it safe. This time, for Ashursts, everything might just come right.