Theodore Goddard and Addleshaw Booth & Co have provisionally agreed a merger, but without deciding to lock partners into the combined firm.
Theodores insiders fear the move is designed to leave the way clear for the new firm to cull partners that it no longer wants after the merger has taken place.
Last year Addleshaws culled 11 partners from its equity and some insiders at Theodores are worried the same will happen to them. “It's like turkeys in a mass vote for Christmas,” one source at the firm commented.
It was announced on Friday, Valentine's Day, that Theodores' partners had voted unanimously to pursue exclusive merger talks with Addleshaws. Addleshaws' executive, which includes senior partner Paul Lee and managing partner Mark Jones, has a mandate from its partnership to decide whether to pursue the discussions.
The firms are to put the merger to a vote in March, with the intention to marry on 1 May. “It's not a done deal but we have great confidence it will be a done deal,” said Lee.
One Theodores source said the lack of a lock-in could be because the two firms will not have time for a clearout of underperforming partners before the merger.
Another worry within the firm is that, without the lock-in, Theodores is leaving itself open to raids on its good partners from outside firms.
However, Theodores senior partner Paddy Grafton Green is confident that his firm will commit to the merger. “You have to win the argument, not lock people in,” he said.
The firm has also changed its partnership deed to give the merger a better chance of going through. Whereas previously 95 per cent of equity partners had to agree to a deal, now only 80 per cent have to give it the thumbs up.
The merged firm would have a combined turnover of £120m, and both firms cite increased critical mass as a major reason for getting together. Theodores clocked up profits per partner of £350,000 last year, while Addleshaws trailed behind with £275,000.
One piece of common ground between mid-size City firm Theodores and Northern giant Addleshaws is their commitment to building an international network together.