Revealed: McGrigors and Pinsent Masons moot £282m merger
McGrigors and Pinsent Masons are preparing the ground for a potential merger in a deal that would make the combined firm the 12th largest in the UK by turnover.
Richard Masters
The firms today confirmed that they are holding merger talks, with partners due to vote on the deal by February.
In a joint statement to The Lawyer, the firms said: “We can confirm that Pinsent Masons and McGrigors have been in discussions about ways in which both firms can work together to look at how we can bring a wide range of legal services to our respective clients, as well as improve their delivery.
“Both firms complement each other well, being leaders in the field of construction, energy and infrastructure. A potential tie-up would greatly benefit the clients of both firms, providing a wealth of market-leading expertise across a number of sectors and practice areas.
“It would also provide a strong platform upon which to grow internationally, with a continued focus in Europe, the Gulf and Asia Pacific.
“We will be spending the coming days speaking to our partners and staff about the proposals and will not be making any further comment at this time.”
Based on 2010-11 figures, a merger between the two firms would create a combined entity with more than 1,200 lawyers and turnover of £282.5m, making it the 12th largest practice in the UK behind Ashurst, according to The Lawyer’s UK 200.
Pinsents has the higher average profit per equity partner (PEP) at £400,000, while McGrigors average PEP is £247,000. That said, McGrigors does operate on a higher profit margin than Pinsents, at 29 per cent versus 21 per cent.
One former Pinsent Masons partner commented: “McGrigors has been struggling and looking for a merger partner for a while, I know that from talking to partners at other firms who have been approached. You have to wonder what the strategy is. Why does Pinsents want a bigger presence in Scotland? The days of bigger law firms being better are long done – it’s all about profitability now. You would think Pinsents would be trying to find more London-based lawyers to fill up the new office and expand internationally.”
In December 2011 Pinsents announced that it would not be renewing its strategic alliance with Salans, as the firm intended to branch out on its own in Munich and Paris in the first half of 2012 (12 December 2011).
Headquartered in London, Pinsents has offices in Birmingham, Edinburgh, Glasgow, Leeds and Manchester. The firm also has offices in Beijing, Dubai, Hong Kong, Shanghai, Singapore.
Under managing partner Richard Masters, who took up the role in 2008 (21 January 2008), McGrigors has undergone significant expansion.
The firm has branched out from its Scottish roots, buying out London litigation boutique Reid Minty (4 August 2008), bulking up its Manchester offering (26 August 2010) and buying out Belfast firm L’Estrange & Brett (28 August 2009).
It has also launched in Doha (14 March 2011) and signed a referral agreement with US firm Husch Blackwell (11 April 2011).
Readers' comments (19)
Anonymous | 19-Jan-2012 3:20 pm
Any firm teetering around the UK top 60-70 will probably be in the top 50 by the end of 2012, purely by virtue of the 'merger-mania'.
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RayJay Johnson | 19-Jan-2012 3:32 pm
A merger thats completely sensible and a little bit predictable. Good luck to them.
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Anonymous | 19-Jan-2012 3:34 pm
Has Pinsents even properly sorted itself out from its last merger?? Still could do with trimming the fat.
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Anon | 19-Jan-2012 3:45 pm
A pretty sensible move.
Gaining sufficient scale is becoming imperative, and 'sufficient' is rapidly going to mean a £1 billion + turnover and the resources and platform to participate in international consolidation.
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Marx | 19-Jan-2012 4:03 pm
Interesting move. McGrigors has really come a long way in the last few years and has left Dundas, Maclays and ShepWed behind. It's profitability may not be great but it's shown itself to be able to adapt and has done it early enough in the curve to look first mover-ish. What's the combined firm going to be called though? Pinsent McGrigors? McPinsents?
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Anonymous | 19-Jan-2012 4:23 pm
So why does Richard look so unhappy in the picture?
I feel like I should 'talk him down'.
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Anonymous | 19-Jan-2012 6:40 pm
I fear for the "squeezed middle" fee earners, the ones least likely to benefit from the birth of this Super-firm and most likely to end up cast into the legal wilderness.
The other big four Scottish firms had better line up a dance partner then or they're just going to be completely dwarfed in terms of size and service offered compared to McPinsents.
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Anonymous | 19-Jan-2012 9:07 pm
I do not see the logic in this move. McGrigors do not have the critical mass in London or abroad that would attract Pinsent Masons or stellar practices that would be of interest. Surely Pinsent Masons would be better consolidating in London with a quality outfit like LG or Stephenson Harewood. The only logical explanation is that legacy Masons partners are looking for more construction/projects lawyers. Why is anyones guess.
Maybe there is something we are missing here? Are Pinsent Masons in trouble?
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Anonymous | 19-Jan-2012 10:01 pm
It could be called Bigger McGrigors
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Anonymous | 19-Jan-2012 11:50 pm
McGrigors was a good firm with quality lawyers and strong HBOS and RBS connections. That wont do them that much good today in real income terms. Pinsent Masons scrubs along outside the top ten uk firms. It does little that distinguishes it, but seems to bob along ok. How does this merger change anything in a positive sense for its partners? Bigger aint always beautiful!
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Anonymous | 20-Jan-2012 10:29 am
excellent journalism yet again (not) by the Lawyer quoting a "former" PM partner with all this knowledge of McG (who have posted strong results) and what PM's strategy should be, we all know who the "former" partner is. Any chance the Lawyer reports could deal in fact instead of trying to give credibility to a disgruntled ex partner?? it's like reading the Sun
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Brian | 20-Jan-2012 2:22 pm
Let not be fooled, this is not a merger it's a takeover. Why is the word take over so hard to use these days? Well put it this way if the 'merger' does happen the new firm will be called 'Pinsent Masons'.
Both firms have been helped through the tough economic problems in recent years by dedicated staff, now I fear a chunk of these dedicated staff that were happy to help in difficult times will now loose there jobs so the pockets of the big wigs will be filled even more by this 'merger'
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Anonymous | 20-Jan-2012 2:44 pm
Perhaps the last poster, who purports to be an insider, can actually explain what the strategy is ? Most of the other comments on this article raise the same question; what does this merger add to Pinsent Masons other than more lawyers in Scotland ?
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Anonymous | 20-Jan-2012 3:52 pm
McGrigors are now seeking shelter in a bigger firm. I bet he L'Estrange partners are wondering what they have done selling up and losing any control of their own destiny
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Anonymous | 20-Jan-2012 4:34 pm
Seems like a good idea to me. Critical mass is increasingly important hence the number of recent mergers.
McG's is a good firm, especially its tax and construction practices and should prove a good fit with PM's.
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Brian | 20-Jan-2012 4:35 pm
As a fee earner not involved in the discussions I can only speculate, but if we join McGrigors the joint firm would become the largest in a few sectors across the UK. They have recently opened an office in Doha and we are in the middle east, it gives us a bigger international base. I really can see the merger being succesful, but I do think the timing is bad, as it is only for sheer greed of the big wigs this will happen. It's hard to see anyone loose ther job, and there will be a few no doubt, but during this difficult time when not many jobs are available it's a sign of neglect from PM and McG if it goes through
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Sceptic | 20-Jan-2012 4:41 pm
Well I have to say that "Pinsent McGregors" has a definite ring to it.
Far better than Pinsent Masons, which has a horrible flat thudding sound,
And surely by now the Masons name is of no benefit, as the only people who remember them are ancient old fogeys like me. So dump it and replace it with the vibrant, throbbing McGrigors of the Glen, Braveheart all over again.
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Anonymous | 23-Jan-2012 6:01 pm
you only have to look at McGrigors humungous overdraft to see what's in this for them - peace from a very unhappy bank. But despite that McGs still has some great clients and people and it's probably a good move for Pinsents to strengthen their Scottish end. McGrigors will get swallowed up though and no mistake and it will be a culture shock for many of the Scots in McGs.
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Anonymous | 24-Jan-2012 4:12 pm
yes McG do have some great clients and people, let's hope they have the sense to get the right people bought into the process to avoid a disastrous transition
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