Reed Smith has secured a crucial meeting with Richards Butler Hong Kong, as the City firm’s hugely profitable arm considers its options.
It is understood that a meeting between Reed Smith and the management from Richards Butler in London and Hong Kong is scheduled for the last week in April.
As first revealed in The Lawyer last Monday (10 April), Reed Smith and Richards Butler have already entered into a heads of agreement, but Richards Butler Hong Kong has not participated in any negotiations to date. However, Reed Smith is keen to include Hong Kong in the merger.
According to well-placed sources, Richards Butler Hong Kong, which operates as a separate partnership, has yet to decide whether to participate with the transatlantic merger. It has almost ruled out going solo and would consider merging with a third-party UK or US firm. The deal has alerted headhunters and other firms, which will provide a number of options.
The Hong Kong office, which turns over £30m, accounts for almost a third of Richards Butler’s £89m revenue. Excluding Hong Kong, Richards Butler’s average profit per equity partner is just £375,000, a figure that is expected to remain static this year. Hong Kong’s contribution bumps that figure up to £460,000.