SJ Berwin split as election exposes pre-merger rift
As dust settles after contested vote, Day prepares to steer firm to transatlantic tie-up
Rob Day
The managing partner election at SJ Berwin has revealed a deep rift in the partnership as divisions persist over the prospective tie-up with Proskauer Rose.
A closely fought contest gave way to accusations of heavy-handed behaviour as supporters of eventual victor Rob Day attempted to drum up last-minute support.
Meanwhile, large swathes of the firm’s global partnership - including the whole of the London tax team and the majority of the real estate group - supported Day’s opponent Perry Yam in the election, in a move seen by sections of the firm as a protest at the lack of transparency over merger talks.
Day starts his tenure as managing partner today (Monday) after defeating fellow corporate partner Yam. But the final margin of victory - just a handful of votes - was far more narrow than many would have first imagined.
Yam is understood to have led Day by 16 votes after the first round of voting, after which the third candidate - litigation partner Hilton Mervis - withdrew. According to sources at the firm, Day’s supporters then embarked on a desperate bid to increase his vote in the 48 hours before the second round closed on 22 October. The tactic has been painted as aggressive by some sources at SJ Berwin.
“It was very persuasive behaviour from some people,” said one partner. “They had underestimated Perry and so tried to persuade people [to vote for Day].”
SJ Berwin has been in talks with its US suitor since May, but despite being in the public domain since then, details of the negotiations have not been communicated to the wider partnership. Only a small section of the firm’s strategy committee, centred on Day and competition head Stephen Kon, have been involved in discussions with Proskauer.
“There’s been no transparency,” commented another partner. “The firm’s completely divided - you could cut a knife through the middle of it.”
Day denied that there had been any intimidation from either himself or other partners, or that the election revealed a divided firm.
“It was a good, positive process,” he said. “It was never a political campaign.”
Away from London, it is understood that the entire Paris office and the majority of Madrid and Munich also voted for Yam.
Day has taken over from Ralph Cohen, who decided to stand down from the role earlier in the summer, 18 months before the scheduled end of his second term.
Readers' comments (10)
Buggin's turn | 1-Nov-2010 1:20 pm
The merger between Berwins and Proskauer is doomed, surely. Berwins is split from top to bottom and who's to say that the Proskauer partners are united. Rob Day would do better to focus on getting Berwins back on track rather than lead them into a merger of questionable benefit.
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Anonymous | 2-Nov-2010 10:25 am
this is the opportunity to do some cherry picking as there are a lot of talented partners there
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Anonymous | 2-Nov-2010 11:28 am
Not surprising the real estate lawyers are concerned about US tie up - look what happened to the Titmuss Sainer real estate team after they became Dechert. US firms don't appreciate what they regard as "dirt lawyers". Expect to see some good people get on the first bus outta there.
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Anonymous | 2-Nov-2010 12:34 pm
The whole Proskauer process has gone on too long. It would be a lot better if the whole things hadn't been played out in the media for the last 6 months and had been kept behind closed doors. Now, sadly, I'd imagine that Proskauer can more or less dictate terms and say take it or leave it
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Anonymous | 2-Nov-2010 1:43 pm
SJ Berwin has two possible routes ahead, merger or mediocrity.
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Stig | 2-Nov-2010 3:44 pm
SJ Berwin was a get-rich-quick vehicle designed to ride the boom years. It a harder market where legal excellence is required, it has struggled. That is the real reason for the merger.
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Anonymous | 2-Nov-2010 4:45 pm
@ Stig - At least SJ Berwin invested in the business during the boom years, such as through office openings.
The firm is now in a difficult position, a lot bigger than the UK-only corporate firms but a lot smaller than the biggest international firms. It really has no option but to merge, the question is with whom.
If they can get Proskauer to agree to a merger then they will have done very well and will have safeguarded a large number of jobs and careers at SJ Berwin.
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Stig | 2-Nov-2010 5:22 pm
In a free market jobs must go if the demand isn't there. Merging to safeguard them is law firm management of the Gordon Brown school. He's toast. Let the chips fall where they may.
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Anonymous | 6-Nov-2010 6:27 pm
These comments are all a touch melodramatic. The reality is that SJB is absolutely fine and back on an upward trend. There's no two way split, and Perry and Rob didn't run on anti and pro merger tickets.
I don't expect any of that to make the headlines though... it's not as interesting as the melodrama.
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Anonymous | 11-Nov-2010 7:14 pm
The fact that talks have dragged for nine months without resolution combined with the departure of so many recently would indicate a large division. Without a US capability, its corporate funds and M&A are not a "seamless" service and cannot hope to compete with the more aggressive US firms that are pushing into the London market. The merger would also mean that associates are remunerated better for the hours they do there..
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