Bird & Bird merger talks spark chaos at Wessing

Munich and Hamburg rebels lead secret negotiations; Dusseldorf opposition could lead to firm-wide split

Bird & Bird is conducting secret merger negotiations with an influential group of Wessing partners.

A group of partners at the German law firm is pushing for a full merger with Bird & Bird. It will present its case to the rest of the firm at a partnership meeting on 24 March.

Bird & Bird and Wessing have a longstanding relationship, but the secret negotiations have led to an intensification of talks between the two firms over the last two months.

However, for the talks to succeed, 80 per cent of partners would need to vote in favour of merger at the meeting. According to one source, this is unlikely. He says that a large part of the Düsseldorf office is opposed to the merger.

Dissension within the firm could lead it down the same path as Gaedertz, which split after the successful merger talks of different offices with Latham & Watkins, Norton Rose and Mayer Brown & Platt.

Düsseldorf is Wessing’s most international office, and its focus on technology makes it the most compatible with Bird & Bird.

“Many partners think that Bird & Bird is not the right partner. Given that our competitors have linked up with UK top 10 firms, we should at least be merging with a top 30 firm,” says the source.

There is also concern that the practice areas of the two firms do not fit. “Bird & Bird is very strong in intellectual property (IP) and IT, but we have two pillars. We do IP and IT, but also M&A, and many of our corporate partners have very strong doubts,” he adds.

Adding to the dissension is the split between nationally and internationally-minded partners.

The source says that the negotiations, which are being led by the Munich and Hamburg offices, could pose a threat to the unity of the firm.

Last month a group of partners at Wessing’s Düsseldorf office approached Andersen Legal’s German firm Andersen Luther. Although the talks fell through, they provide further proof of division within the firm.

Another Wessing partner admits that the firm has a close relationship with Bird & Bird, but says that it also has relationships with Nabarro Nathanson, Theodore Goddard and Eversheds.

Bird & Bird executive chairman David Kerr confirms that the firm is keen to develop in Germany.

“Our strategy is to build a strong international firm with a clear sectoral focus, but with a full service,” he says. “Germany is a key market for our client base, and we’re a client-driven practice.”

However, a source close to Bird & Bird admits that the firm is talking to Wessing. He says that the talks are at a relatively early stage, but that Bird & Bird is interested in a full merger with the whole firm.

He denies that Bird & Bird’s industry focus causes a problem. “We’re committed to being a full-service firm, and we’re looking for corporate capability everywhere,” he says.

Despite more than 50 per cent of Bird & Bird’s revenue being generated by the corporate and commercial practices, only 6 per cent comes from the commercial sector.

The firm is ranked 47th in The Lawyer 100, but its profits per partner decreased from £384,000 in 1999 to £341,000 in 2000, largely due to its investment in the European network.

Wessing Chairman Wolfgang von Meibom was unavailable for comment.