KLegal signed its merger agreement with Scottish giant McGrigor Donald in November 2001 – a deal first revealed by The Lawyer (12 November 2001).
The merger, aimed at ramping up KLegal’s London operation, was the first involving an accountancy-tied firm in the UK. The merger put the firms in a strong position to rival the mammoth Andersen Legal Network, which came crashing down following the Enron scandal, as well as the smaller Landwell and Tite & Lewis.
It is understood that McGrigors held talks with a number of English firms, including DLA, as it looked to grow its London office. One key factor that attracted McGrigors to KLegal was the comfortable fit between the former firm’s banking practice with the latter’s technology focus. McGrigors advised both the Halifax building society and the Royal Bank of Scotland on the launch of their respective internet banking facilities.
The firms formally merged on 4 March 2002. The deal was celebrated by the firms concluding their first joint deal,a property joint venture between Halla-dale Group and the Bank of Scotland (The Lawyer, 4 March 2002).
Despite the rumours, the merger process was relatively smooth, although in January 2002, McGrigors lost a chunk of its London property team, including ex-London managing partner Steven Scates, to the now defunct US firm Altheimer & Gray.
Nonetheless, the most contentious issue in any merger – combining the different profit-sharing systems – was put to bed early.
When the two firms started merger talks, they agreed to drop McGrigors’ lockstep system in favour of KLegal’s more meritocratic performance-related pay.