Two years ago this month, The Lawyer revealed that KLegal and McGrigor Donald were in secret negotiations to merge.
Then McGrigors was a rated Scottish outfit with a few top-notch institutional clients, no international network and a relatively small and not particularly profitable London office. Which is funny really. Because today, in the worst case scenario, McGrigors is a rated Scottish outfit with a few top-notch institutional clients, no international network and a relatively small and not particularly profitable London office.
Managing partner Nick Holt argues that KPMG and a rebranded McGrigors can continue with a “best friends” relationship.
However, insiders will tell you it was difficult enough to persuade KPMG partners to refer work to KLegal when they shared the common identity necessary to offer an integrated multidisciplinary partnership concept to clients.
At the top end, KPMG insolvency guys sent the likes of TXU to their mates at Allen & Overy (even though A&O was already committed to other parties on that deal). In the mid-market, KPMG partners in Manchester usually preferred to instruct their mates at DLA. Are they really likely to call on Holt and co now?
On the international front, the former KLegal firms hope to negotiate a new alliance, but even if they manage to, can it ever be much more than a glorified Lex Mundi, and weakening as the days go by?
Frankly, I feel sorry for the McGrigors partners who were sold a deal that died the day Enron broke, and sorry for the legacy KLegal partners who have either left or who now worry about their positions.
Sorry even for management, some of whom are decent people. But they must carry the can.
Insiders say KPMG could have been persuaded to do an Ernst & Young type deal.
In reality, they could not even coordinate the KLegal-KPMG split and the formation of a non-accountancy-affiliated European legal network. And that was the only possible silver lining to this dark, dark cloud.