Ashurst prepares for October vote over Oz merger
28 June 2013 | By Yun Kriegler
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Ashurst has decided to bring forward the timetable for the proposed full merger with its Australian offices, which could see both sides’ partners voting on the deal in October.
The Lawyer first unveiled the firm’s intention to seal the full financial merger this calendar year rather than previously stated combination in 2014 in March (11 March 2013).
Sources within Ashurst have now confirmed that the full merger vote is set to take place in October. A 75 per cent majority of UK partners need to vote in favour to see the deal through.
It is understood that partners at Ashurst Australia will vote on the same day. However, it remains unclear what percentage will be required to pass the deal.
The vote will take place through an online platform after additional information on the full merger is handed out to partners, supplementing what has already been set forth in the initial memorandum of information for the combination between Ashurst and Blake Dawson in September 2011 (26 September 2011).
The full merger, if voted through, would see all partners of the two firms on a single managed lockstep with a single global profit pool.
Comparable average profit per equity (PEP) has been a condition of the full merger all along (26 September 2011) and the two firms have taken various approaches to close in on financial alignment.
At the time of the initial tie-up, legacy Blakes’ PEP was within 10 per cent of Ashurst’s s £723,000. When originally announcing the merger in September 2011, Ashurst senior partner Charlie Geffen said no “reshaping” of the Australian firm was necessary as the deal would increase revenue for the Australian offices.
However, the contracting legal services market in Australia and the recovering sterling to Australian dollar exchange rate may make achieving compatibility in profits more challenging.
A report in The Australian Financial Review in January 2013 speculated that between 20 and 50 equity partners of Ashurst Australia were being asked to leave or de-equitised. But Ashurst’s Australia managing partner John Carrington told The Lawyer that the firm’s partner headcount would not change “in any substantial way” (1 February 2013).
Legacy Blake Dawson moved away from an all-equity partnership prior to the Ashurst merger. As a result the firm had a decline in the number of equity partners and an increase in the number of fixed-income partners.
In another alignment exercise, the UK arm revamped its capital structure by asking partners to put capital into the firm upfront for the first time. Blakes partners already invested in the firm in this way, but Ashurst partners previously saw a proportion of profits held back instead (10 September 2012). In May, the UK partnership moved six partners down from its so-called super-plateau, marking the first time that the firm has removed members from the 65-point level since it was introduced in 2007 (7 May 2013).
According to The Lawyer Asia Pacific 150, two firms had a combined global revenue of $908.5m in 2011/12, with $386m, or 42.5 per cent, contributed by the Australian arm. At the end of 2012, the two firms had a total of 906 lawyers in Asia Pacific, 215 of whom are partners, making it the third largest international brand in the region.
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