Rumour mill turns up Garretts and Simmons talks

SPECULATION is rife that merger talks may be taking place between Garretts and Simmons & Simmons despite denials from senior management at both firms.

If a merger goes ahead, it would give Garretts' parent, accountancy firm Arthur Andersen, a massive boost in the race among the Big Six to enter top-tier legal services.

But Bill Knight, Simmons' corporate finance partner, denied the rumours, adding: "We would not rule it out. We are always interested in ways to improve our business and are always open to discussion about our future. But we are not having any discussion with Garretts and have no present plans for merger talks."

The speculation follows rumours of talks between Linklaters & Paines and Simmons & Simmons, fuelled by the move of Simmons & Simmons' litigation department from its Wilson Street premises into Linklaters & Paines new City premises at Milton House, Silk Street, two weeks ago.

Knight slammed the rumours as "ridiculous", stating that the firm was "simply sub-letting a small piece of space which was "bound to be temporary".

A former Garretts partner said: "There was an accepted view that the only way we could grow as a firm was through a merger, and Simmons & Simmons would be about the right size."

Simmons was known to be negotiating with Andersens over their joint offices in Brussels, Lisbon and New York, held under the Club d'Abogados alliance. Andersens joined the alliance when it merged with Spanish firm Garrigues last February.

And the arrival of a Labour government pledged to allow MDPs will step up pressure on the Big Six to increase the quality of their legal work. A leading recruitment consultant said: "The Big Six know that the five largest law firms are powerful enough not to be interested in a takeover by accountants.

"But the next five firms - Lovell White Durrant, Herbert Smith, Simmons & Simmons, Ashurst Morris Crisp and Norton Rose - are seen as ripe targets. There are some serious talks going on," he added.

Andersens has also been linked with Herbert Smith in the past few weeks. Meanwhile, KPMG is believed to have talked to Norton Rose, and Price Waterhouse has openly asked big City law firms to approach it about an alliance.