Merger mania reaches chambers
12 June 1999
24 March 2014
5 December 2013
19 February 2014
29 July 2014
10 February 2014
Medium-size chambers are teaming up to survive in an increasingly competitive market. Matheu Swallow reports.
Intense market pressure is driving chambers inexorably toward merger and rapid consolidation simply to survive.
Following revelations that Christopher Purchas QC's 2 Crown Office Row and Michael Spencer QC's 1 Paper Buildings are to merge (The Lawyer, 22 November), there has been a flurry of chambers entering merger talks and reviewing their position.
It is believed that Jean Ritchie QC's 4 Paper Buildings has been in merger talks with Edward Faulks QC's 1 Serjeant's Inn.
Lateral movement of senior barristers often acts as a catalyst for merger, and 4 Paper Buildings has suffered recently from the loss of several high-profile silks.
Douglas Hogg QC and Robert Marshall-Andrews QC both left in the summer, followed by Nicholas Davidson QC, who moved to John Powell QC's 4 New Square.
However, senior clerk at 4 Paper Buildings Stephen Smith says a merger is not taking place. 5 Paper Buildings, a 25 tenant set practising in commercial and civil law, is also believed to be in tripartite merger talks.
These rumours have been intensified by the news that head of chambers Antonio Bueno QC is leaving the set for an unknown destination.
Richard King, who takes over leadership of the set at the end of the year when Bueno leaves, says: "We are very sad that Tony is leaving us. He has led us for over 14 years and chambers have come a long way under his leadership.
"We are, however, very excited by our plans for the new millennium - BarMark, expansion and even, possibly, merger."
Vice chairman of the Institute of Barristers Clerks and senior clerk at 199 Strand Martin Griffiths says: "It is something that chambers generally would have to consider in the current climate and market."
The word is, from several sets who have already found their marriage partners, that rival chambers have already made serious approaches, and the chambers known to be looking for a merger may be just the tip of the iceberg.
"Merger now seems an inevitability. We have received a number of approaches but have yet to find a suitable partner," says a senior clerk from a medium-size chambers.
There are a whole host of reasons forcing chambers to consolidate, either by lateral hires or mergers.
The leading commercial chambers, as well as some sets practising in niche areas such as tax, continue to maintain their market share, but all accept the need for continued growth.
However, the magic circle commercial sets, at least, prefer this to be by way of selective lateral hires.
Richard Gordon QC, for example, was poached by Brick Court Chambers from 39 Essex Street because of his expertise in European and public law.
It is these practice areas that the magic circle sets are particularly keen to enhance, although most would also consider bolting on a small niche tax or company set as well.
Almost all common law sets are attempting to consolidate and most seem prepared to consider merger.
This is particularly true of those competing for a share of the legal aid market, both criminal and civil.
Investment in premises, IT and support staff, and the necessity to present a corporate image through branding, requires substantial investment.
Chambers also need to offer specialist teams as clients develop panels of chambers for particular sectors.
Chairman of the Bar Council Dan Brennan QC says: "The area of concern is chambers of 20 to 40 tenants, which is traditionally the size of chambers.
"For chambers of this size it is not so easy to form specialist groups."
Unless a set can offer strength in depth it will not be selected for the panels of solicitors, in-house legal teams or local authority work.
The BDO Stoy Hayward report into barristers' chambers reveals that most lateral movement is from small to larger chambers.
Conditional fee agreements represent another factor as chambers need to be larger in order to be able to spread risk to accommodate their increasing popularity.
The Lord Chancellor's proposal to restrict the use of silks and dual representation in criminal cases will only serve to intensify the plight of chambers in the 20 to 40 tenant bracket.
This year has seen a massive increase in the amount of lateral movement, even at the top end, with "£1m a year club" member David Oliver QC moving from 13 Old Square to Erskine Chambers.
And 1999 has also seen a raft of mergers. In October, 11 Bolt Court and 7 Stone Buildings tied the knot, in August Welsh sets 32 Park Place and Newport Chambers joined forces and in May Liverpool's Martin's Building and The Corn Exchange merged to create the fifth-biggest set in the country.