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US mid players see downturn as opportunity to trawl UK for big fish. Julia Berris reports
One of the upsides of the downturn for aggressively minded law firms is that it generates almost limitless possibilities if it is growth you are after.
The opportunities for mid-tier firms to hire star partners or teams that would have been out of their league during the boom period abound. Ditto the transformative transatlantic merger.
While for some it may seem a risky time to be considering major expansion, for a number of US firms now could be exactly the right time to team up with a firm on the other side of the Atlantic.
Nixon Peabody has long been an advocate of international growth and currently has London squarely at the centre of its European aspirations.
The firm’s international strategy group, led by New York-based partner Michael Murphy, has developed a global game plan designed to grow the 800-lawyer firm by 50 per cent over the next four years. This would result in 25 per cent of its lawyers being based outside the US.
“The firm wants a transatlantic merger,” says an inside source. “It’s been talking to UK firms for a while now. It’s serious about it.”
Nixon Peabody already has a London office headed by Stavros Adamidis, a former New York partner. The London office was established primarily to build on the firm’s international sport stadium finance business, which boasts Goldman Sachs as a key client.
But this is not enough for the ambitious Nixon Peabody. A merger would expand its practice into something much more.
“We want to have credible private equity, IP, insurance and reinsurance and infrastructure groups on the ground,” says Murphy. “We’ve expanded into Shanghai and Paris during the past year. We’re committed to growth.”
Like Nixon Peabody, Squire Sanders & Dempsey has made no secret of its merger ambitions.
The US firm took a team from German firm Haarmann Hemmelrath in London in 2006 and was in advanced talks with fellow US firm Bryan Cave during the same year.
Squire Sanders is thought to be one firm close to Denton Wilde Sapte that hopes to secure a merger, although sources at both sides of this potential deal say there are other options on the table.
For Squire Sanders, a credible UK merger would give it the much-needed critical mass it currently lacks in the City, where it launched in 1992.
The Cleveland-headquartered firm has succeeded in expanding into Central and Eastern Europe. However, a transformative merger has long presented major challenges, not least politically, for the US firm.
Its traditional Cleveland-based management team is thought to struggle with the idea of diluting power by merging with another firm.
“For years a number of UK merger candidates have been discussed,” says one former partner. “They haven’t got very far because Cleveland doesn’t want to give control to anyone else.”
Squire Sanders may offer a credible US base, but how attractive is its offering?
It is an Ohio-based firm with a small, 25-partner presence in New York, which is still the financial centre most often at the heart of UK firms’ US aspirations.
“US firms may want to merge with a UK firm but often don’t look at it in the right way,” argues one UK-based recruitment consultant. “What’s in it for the UK firm? It’s a big risk for a UK firm and I don’t think many US firms recognise this.”
Another firm that has been particularly vocal about its UK ambition is Bryan Cave. Earlier this year (6 April) The Lawyer reported that the firm had reignited its passion for a merger, this time on UK soil.
Its current London office, which launched in 1982, has 50 lawyers on the ground, but the firm is also on the hunt to secure a UK merger partner.
Byran Cave London managing partner Anthony Fiducia told The Lawyer in April that the firm hopes to secure a merger with a UK firm within 12 months.
The St Louis-headquartered firm clearly has big ideas for Europe in general, which was highlighted by its launch in Paris last year when it snared Dechert partners Kathie Claret, Jilali Maazouz and Joseph Smallhoover (The Lawyer, 2 December 2008).
Bryan Cave, Nixon Peabody and Squire Sanders have all been outspoken about their hopes for transatlantic tie-ups, illustrating that all three believe the downturn does not necessarily hinder strategic progress, but can create opportunities for those brave enough to seize them.