City firm Nicholson Graham & Jones (NGJ) has entered the final stages of merger discussions with US national firm Kirkpatrick & Lockhart, just six months after negotiations with Pinsents collapsed.
The transatlantic firm will be known as Kirkpatrick & Lockhart Nicholson Graham and will contain more than 900 lawyers. Kirkpatrick has 10 offices in the US but this is its first step outside its home market.
NGJ chair Michael Johns told The Lawyer: “With more than 900 lawyers it gives us a brand, it gives us clout in the recruitment market, it offers everyone a future and gives us opportunities in Europe. An Anglo-American firm ought to have representation in mainland Europe.”
The management committee of Kirkpatrick and the partnership board of NGJ have approved the talks, informed partners, and hope that negotiations will be complete by September or October for a final partnership vote.
Kirkpatrick had revenues of $320.5m (£172.7m) in 2003, compared with NGJ’s £26.5m ($49.2m).
This merger bears all the hallmarks of a shotgun wedding – talks only began in March this year, just weeks after NGJ’s negotiations with Pinsents fell down. And while Kirkpatrick is clearly the dominant partner in the negotiations – few would expect the Nicholson Graham suffix remaining for long – this does not automatically mean NGJ will be getting a bad deal.
The firm fully recognises the need to boost profit per partner – £240,000 last year – to something nearer Kirkpatrick’s $585,000 (£315,000). This is not insurmountable. NGJ’s profits are up 14 per cent this year and three years ago stood at £320,000.
Chair Michael Johns has talked of “a dying breed of mid-size firms” and was reluctant to merge upwards to join the crowded space in which Simmons & Simmons and Denton Wilde Sapte compete. So, when the talks to form a national firm with Pinsents broke down, a transatlantic merger was the other option to stand out from the crowd.
Johns has secured a seat on what is expected to be a five-man executive committee and, perhaps most importantly, the Kirkpatrick model allows its offices a great deal of independence. While NGJ can expect to lose some partners as it loses its identity, Kirkpatrick may have gained a decent-sized (130 lawyers), stable London office, which complements some practice areas, such as real estate. With comparable revenue per lawyer figures ($490,000 at Kirkpatrick and £248,000 at NGJ), both firms are also operating in a similar marketplace.