Real estate

When Berwin Leighton and Paisner & Co announced their merger plans, they made no secret of the fact that the deal was corporate driven. But when it takes effect on 1 May, the firms’ 160 property fee-earners will also be moving in together. Berwin Leighton brings some 22 property partners, double that of Paisner. The department’s projected turnover for 2000/2001 is £32m. Philip Bretherton, Berwin Leighton’s head of property, says that figure is the sum of two parts and does not incorporate the potential for growth that he and his Paisner equivalent Chris Adams have identified.

The pair seem to have hit it off and have lost little time in developing a new internal structure. They say it was obvious that Bretherton – who stepped into the leadership role after David Taylor’s shock departure – should head the merged group, while Adams will take a role on the firm’s management board.

Admittedly, Paisner’s property lawyers, except for consultant Geoff Hayhurst, are little known. So what do you get if you cross one of the City’s best-known property practices with a lesser known team? One answer is that Berwin Leighton gains Paisner’s niche in retail occupiers and leisure. Ironically, it comes less than a year since Berwin Leighton’s property group set up a think-tank to consider adding leisure and hospitality to its impressive spread of development, institutional, public finance initiative (PFI) and property finance work.

The group decided that such a move would prove too expensive, suggesting that the leisure and hospitality market was not seen as being profitable enough for a leading City property firm. But whatever the spin, the fact is that Berwin Leighton Paisner will have a leisure and hospitality arm as a result of the merger. Paisner clients include heavyweights such as Forte, thanks to partner David Levy’s 25-year relationship. Most recently, he has been working on the disposal of parts of the Forte hotel estate by Compass Group, working with lead adviser Freshfields Bruckhaus Deringer. Paisner partner Rachel Philips, who worked with Levy on the deal, will head the new leisure and hospitality team within the merged firm.

Berwin Leighton also gains a regulatory and licensing group, led by Craig Baylis. Paisner has some experience advising Tesco, a major Berwin Leighton client, so it is a synergy that the merged department will be eager to exploit. Some conflicts may arise when Paisner acts for a Tesco landlord, which means Adams will have to withdraw when necessary. The other obvious crossover client is British Land. Paisner’s relationship with the property company is via Great Universal Stores, which has a 50-50 joint venture with British Land. Again, it is a synergy worth pursuing. No doubt other common clients will be identified lower down the Paisner and Berwin Leighton lists.

Bretherton and Adams point to further gains. The new firm will be keen to wow Paisner clients such as Compass with Berwin Leighton’s well-established PFI expertise. And the new firm’s enhanced corporate strength (it will jointly field 150 corporate fee-earners) fits well with current trends for corporate-driven property transactions and property deals fronted by corporate vehicles.

Bretherton is aware of the need to keep everyone happy and looks out for any potential hotspots on his regular floor walks. But it is impossible to please everyone. Paisner has already seen some fallout on the corporate side, with top partners Stephen Nelson and Paul Lewis leaving for the London office of US firm Squire Sanders & Dempsey, as revealed by The Lawyer last month. In property, Paisner partner Janet Auckland looks set to be the first to go: she has a particular interest in residential work and plans to join two-partner Eversleys Solicitors in Islington. She may not be the last of Paisner’s older property partners to decide they fit better elsewhere.

More pressing for Bretherton and Adams, however, is the need to keep the firms’ young guns happy. The general approach has therefore been to appoint the up and coming as team leaders within the new department. With those decisions out of the way, the next big test for Bretherton and Adams lies just around the corner, when the firms vote this week on partnership promotions.