Eversheds has the US in its sights, with chief executive Bryan Hughes confirming the firm is targeting a merger.
The news today that Eversheds partners have voted overwhelmingly in favour of pursuing a US merger, with 90 per cent getting behind the plan, has been a long time in the coming (20 November 2014).
Eversheds established a US strategy group three years ago featuring chief executive Bryan Hughes, chairman Paul Smith, head of company commercial Keith Froud and head of human resources Martin Warren also consists of employment partner Martin Hopkins, head of employment law Joanne Hyde, litigation partner Damian Hyndman, co-chair of cross border M&A Robin Johnson and commercial disputes partner Neville Byford.
Finessing the firm’s global footprint has been high on the agenda at Eversheds’ since the firm’s 2020 Vision was launched at its partner conference in June 2012 (9 July 2012).
Meanwhile the vote to actively seek out a US merger partner took place at the firm’s partner conference in Rome in June this year. Since then, as Hughes outlined today, the chief executive and his partners have “started looking at the market in earnest”.
The conference involved a series of presentations on the implications of a US merger. These included Smith talking on the strategic importance of the move and Froud outlining the potential challenges.
According to Hughes, the challenges discussed included finding a firm with a similar remuneration structure, overcoming accounting differences to achieve full financial integration and finding the right cultural fit.
Head of human resources Martin Warren presented an analysis of the top 200 US firms by revenue, highlighting the numerous US markets.
Hughes describes the US as a “vast, complex country” with seven or eight different markets.
“For example, if you speak to a litigator [their] preference may well be a Washington regulatory firm, the finance and corporate lawyers on the other hand are more likely to opt for predominantly a New York firm whereas the technology lawyers would want to head to Silicon Valley. There is therefore not one simple fit for us,” he says.
However, Hughes adds that this was not his greatest concern.
“If you look at it, what is going to tilt a merger? That the IT is not compatible can be solved, that there is no Hong Kong office? That can be dealt with later. But if you don’t think the same way it will have an impact,” Hughes says.
Hughes admits that in an ideal world profit and average profit per equity partner would look fairly similar to that of Eversheds but on the matter of shared culture and values he says, “these are fundamental issues which cannot easily be resolved and if there is misalignment on these issues any combination could well be doomed from the start. Cultural fit is therefore key for us”.
That said, Eversheds partners did make it clear that they would not want to be the “junior partner” in any potential tie-up. Hughes is adamant that any combination would have to be mutual beneficial to both sides.
“We do have a number of historical relationships, some are little more than referral relationships, others are very sector specific and some we know very well,” he adds. “I don’t think it’d be right to say ‘we’ve known them for 20 years so we’ll merge with them’. We’re looking at the whole of the relevant tranche of the market.”