Hard lessons of the UK-US marriage

Theodore Goddard's move to sell off its Eastern European office to its former alliance partner, US firm Dewey Ballantine, is another example of the trans-Atlantic dream failing.

In the late Eighties and early Nineties, in the name of business strategy, firms looked at every option to expand. Globalisation seemed to provide the opportunity and many went down this path. And those who were not big or rich enough to do it alone found partners. At the time, the debate focused on how best to do it.

Five years later, the picture is clearer. A plethora of US-UK legal alliances has come and gone in the intervening years. Firms such as Macfarlanes, Nabarro Nathanson and Theodore Goddard climbed into bed with US firms in the hope that, at the least, it would provide more work and in some cases may possibly lead to merger.

Instead, all have split and in many cases former partners have gone into competition against each other. It would be easy to conclude that such alliances cannot work, particularly between UK and US firms. Cultural differences intrude, as do the plans of US firms to practise English law.

However, with foresight and hands-on management, there is no reason why an alliance should not work. Firms must maximise their ability to be international. If the only way to do this is through an alliance, then it is imperative they show commitment and synchronise mutual goals from the first stages. It is easy to set up an alliance. Not so easy are the months and years later when the hype has died down and the practicalities of working together tell the real story.

The lesson is clear – without a thorough and realistic examination of the motives and without real management when it is formulated, the chances are that an alliance will flounder.

And like a marriage without commitment, divorce is often the only way out.