Speechly Bircham and Charles Russell partners are going to the polls today (16 July), to cast their votes on their potential £126m merger between the firms.
It is thought that the firms have set a 75 per cent approval threshold in order for the merger to be rubber-stamped. If the deal is approved the firms will combine to create an outfit named Charles Russell Speechlys LLP, home to 126 partners with nine offices spread across the UK, Europe, Asia and the Middle East.
Sources close to the firm insisted that the tie-up was likely to be approved, with management having secured widespread support from partners.
Speechly Bircham has held regular partner meetings to ensure that the majority remain in favour of the move, the most recent understood to have taken place in early July.
The merger is thought to have been a reponse to the firm’s failed merger discussions with Withers in 2013, which fell flat at the partner vote stage (23 May 2013).
One source said: “It’s sensible to have a regular meeting to see whether anything has come out which may cause reservations.”
Among the issues needing to be resolved are thought to be both firms’ relatively costly City offices, and incompatible IT systems (29 April 2014). They were also decisions to be made regarding which partners would head up the merged firms’ various practice groups.
However, sources agreed that the merger would be beneficial to both firms. One noted: “It’ll give Speechly a blood infusion. Charles Russell is a very good, similarly-minded firm. It makes sense and it works”.
The two firms announced they were in merger talks in February, when they published a certificate of incorporation for a new entity Charles Russell Speechlys LLP on Companies House (21 February 2014).
It’s understood that a vote was initially scheduled to take place before the end of the 2013/14 financial year in May. However, this was pushed back to today when it became clear that the original date was unrealistic.
A joint statement from both firms as the talks were unveiled said: “Both are well-established firms with complementary practice areas in the commercial, real estate and private wealth arenas.”
It continued: “A combination would further strengthen these core practice areas while providing a strong platform for the firms’ shared ambitions for growth in the UK and internationally”.
According to its LLP filings for 2012/13, Speechly Bircham recorded a turnover of £57m, dropping by 1 per cent from £57.6m 2011/12. The firm’s revenue has remained relatively flat since 2009/10, when it hit the £58.4m mark.
Net profit has increased, however, rising by 2.3 per cent globally in 2012/13, from £11.3m to £11.6m. Global profit per equity partner (PEP) fell by 2 per cent from £299,000 to £293,000 during the same period (28 June 2013).
Meanwhile, revenue at Charles Russell inched up by 1 per cent from £68.1m to £68.9m in 2012/13. Net profit rose 8.7 per cent from £12.6m to £13.7m, and its average PEP jumped up 11 per cent from £280,000 to £311,000 – aided by a small drop in the number of equity partners from 45 to 43 (10 January 2014).