Stringer Saul dismisses critics of Canada merger

Stringer Saul, a 20-partner London firm best known for its life sciences practice, is to become the London office of Canadian giant Fasken Martineau DuMoulin, as first reported on www.the lawyer.com (4 December).

The deal, due to go live on 1 February next year, will create a £110m firm called Fasken Martineau Stringer Saul in the UK. It will have offices across Canada as well as in New York and Johannesburg. It is the first merger of full-service Canadian and UK law firms.

The deal will see £8.5m Stringer Saul form part of a 650-lawyer international outfit. The London firm currently has 20 partners, 10 of when are full equity.

All 10 will join the 25-rung equity ladder in the combined firm, with their remuneration guaranteed for a two-year transitional basis. Average profit per equity partner at both firms last year was thought to be in the region of £250,000.

Delighted though the partners of Stringer Saul and Fasken are with the deal, it has already raised questions in the London market as to whether it will generate enough work for Stringer Saul to make it pay.

“On the surface it doesn’t make sense,” said Alan Hodgart, one of the best known consultants on law firm mergers. “Why would a Canadian firm want something so small and specialist in London? And what’s in it for Stringer Saul? I can’t believe they would have that many clients in Canada.”

The continued attraction of AIM was highlighted by both sides as the prime rationale for the deal.

The last year saw around 80 new admissions to AIM, 44 of which were from Canada. Stringer Saul has taken more than 100 companies to AIM since its inception.

Stringer Saul managing partner Norman Ziman said the deal with Fasken made it “well placed to reap the benefits of the continued stream of instructions in this area”.

However, the managing partner of one of Stringer Saul’s rivals in that market, Rosenblatt Solicitors, said he was also surprised by the deal.

“If the prime reason for this merger is AIM then it sounds remarkably short-sighted to me and an odd reason to merge,” said Ian Rosenblatt. “Unless there’s also traffic going back the other way to Canada for Stringer Saul, then it would make more sense simply to have a fee-sharing arrangement.”

Stringer Saul finance partner David Smith said Rosenblatt’s comment was “sensible” if AIM had been the only rationale for the deal. “AIM may be the thing that’s brought us together, but that’s because it was the low-hanging fruit for both of us,” he said. “There are many other areas of synergy, such as our life sciences practice, an area which in Canada is much younger but rapidly growing.”

Fasken is particularly well known for its mining strength, an area that is the single largest sector of companies listed on AIM. It also acts for a number of pharmaceutical companies throughout Canada, including Pfizer.

However, the question remains whether or not Stringer Saul would have been better off seeking a merger with an appropriate US firm.

As one rival put it: “Perhaps there’s a reason why there hasn’t been a UK-Canadian merger before?”