According to sources, the talks, exclusively revealed by The Lawyer (7 February), have hit the rocks over “cultural differences” between the two firms.
Within the past two weeks, certain partners have made it known to the management of both Ashursts and Latham & Watkins that they are unhappy about the talks, stating that the “combination” will not work.
One source says that the dissatisfaction is mainly coming from Latham & Watkins' partners, who are finding it difficult to see how the firm will fit with Ashursts.
He says: “The US side has lost enthusiasm for the merger – it is on the slide.”
It is also understood that Latham & Watkins' London office has been against the merger since the beginning, believing that an alliance would strip it of any independence it has won from its US parent.
One source says: “It is always hard to know what 'cultural difficulties' means. It usually means that one person does not like another person.
“There are some powerful lawyers at Lathams' London office and I do not think they want it swamped by Ashursts.”
Sources say that the suggestion of a merger between the two firms has caused a mixed reaction at Latham & Watkins since its inception.
A source says: “There was confusion. In the London office they said that it wasn't happening.”
But it is believed this unhappiness has spread to the US. The source says: “The fact is that they just don't like Ashursts.”
It is anticipated that this is Ashursts' last credible stab at a merger after it failed to integrate itself with Clifford Chance in 1998 in an attempt to bolster its corporate finance capability.
A merger between the two firms would cement its financial law capability as Latham & Watkins has an impressive client list, including investment giants Goldman Sachs and Deutsche Bank.