The proposed merger of Richards Butler and Theodore Goddard broke down due to objections by Theodore Goddard partners, it is claimed.
The merger would have created the 12th largest City firm in terms of fee earners.
Peter Kavanagh, managing partner of Richards Butler, says certain partners raised objections to the proposed merger when it was discussed last Monday and says management agreed with the objections. Corporate and finance partners especially did not think the merger would strengthen the firm, he says.
He adds that it “would not be appropriate” to reveal the numbers who voted for and against the merger.
But The Lawyer understands both firms' management teams were in favour of the merger and a number of Theodore Goddard partners felt the merger would be a takeover by Richards Butler.
Richards Butler partners had not voted on the proposals when Theodore Goddard pulled out, but chief executive Chris Schulten says: “We have a history of acknowledging the need for change and taking decisive action.”
He says he is “disappointed” Theodore Goddard pulled out, after it made the initial approach to Richards Butler in 1997.
Denton Hall withdrew from three-way talks with the two firms in October last year, after a dispute with Richards Butler over the integration of the Hong Kong offices of both firms.
Richards Butler and Theodore Goddard will be considering alternative merger options in the future to strengthen their businesses.
Schulten says: “Our analysis suggested that a merger would be the right move for the firm and it remains a valid strategic option”, while Kavanagh says Theodore Goddard's choices include a merger, or recruiting teams of partners from other firms.