Dickson Minto, Willkie eschew marriage for long engagement

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Willkie Farr & Gallagher is one of many US firms to be touted as a potential Dickson Minto merger partner in recent years, but, unlike most, the fit between the pair is remarkable.

Both firms are very much known for the strength of their private equity practices and in profitability terms they are near identical: for the past few years average profit per equity partner (PEP) at Dickson Minto has topped £1m, while Willkie’s PEP came in at $2.23m (£1.12m) for the 2007 calendar year.

Despite this, while the firms were in talks during the mid to latter part of 2007, it is understood that discussions never made it past the preliminary stages.

Dickson Minto senior partner Alastair Dickson recently underlined the reasons for this when he emailed partners to stress that anything that led to the firm’s “complete autonomy and independence being compromised in any way” would not be countenanced.

That said, Dickson did draw attention to the close relationship between the two firms, adding: “The firm is exploring ways in which we might work more closely with them and handle some of their requirements for legal advice in the UK.”

While maintaining the independence of Dickson Minto is one obvious reason for avoiding a merger, one former partner suggests that preserving the firm’s profit-sharing arrangements could be another.

The former partner points out that, while Dickson Minto positions itself as a London and Edinburgh firm, most of its money is made in London.

While being interviewed for The Lawyer UK 200 Annual Report 2007, Dickson said turnover generation between London and Edinburgh has evened out in recent years thanks to a growing property practice north of the border. But the former partner says: “Partners in Edinburgh got paid the same as the guys in London, so they were really coining it. That’s off the back of the London office, and Willkie would notice that the London office does really well, while the Edinburgh office is making what firms in Edinburgh make.”

Of the firm’s 17 partners, just five, including Dickson, are based in London, with fellow name partner Bruce Minto working out of the firm’s Edinburgh office.

While private equity expert Dickson, who is in his late 50s, is very much seen as the lynchpin of the business, Minto still has significant influence within the firm.

While the Edinburgh partners are believed to have shied away from any union that would have diluted their profit share, the fact remains that Dickson Minto is a staunchly independent firm. It has had numerous white-shoe suitors over the years, but it is understood to be several years since the partnership has taken any of them seriously. Until now.

With the issue of Dickson’s retirement looming ever larger, some kind of succession planning has to be made, with merger being a potential solution.

As one former partner says: “Although he’s showing no signs of even thinking about retirement, he needs to do something to position the firm for it.”

Dickson has categorically denied that there will be any kind of alliance as a precursor to a merger with Willkie, even though the firms are looking into how they can work even more closely together.

The pair certainly have history. In 2000 they teamed up to advise oil company Elf when it entered a partnership with Vinson & Elkins client Enron and Simmons & Simmons client United Arab Emirates Offsets Group to construct an oil pipeline in the Middle East.

More recently Dickson Minto advised French private equity house PAI Partners on the acquisition of Kwik-Fit from CVC Capital Partners, with Willkie advising on the French aspects of the deal.

A marriage may not be on the cards, but a courtship has certainly begun.