Dewey Ballantine and Orrick Herrington & Sutcliffe‘s London offices remain focused on their respective independent growth strategies, despite last week’s confirmation that the two US heavyweights are in merger talks.
As revealed on http://www.thelawyer.com (12 September), the two US firms’ respective chairmen, Morton Pierce and Ralph Baxter, confirmed that the firms are in preliminary ongoing merger talks in a bid to create a new top-15 US firm.
If the merger comes to fruition the combined firm would have more than 1,200 lawyers and come close to $1bn (£530m) in revenue. Its London presence, meanwhile, would top £33m in turnover.
But despite the public hype created by the revelation, Dewey’s and Orrick’s London managing partners Fred Gander and Martin Bartlam are reluctant to enter into a public debate, preferring instead to focus on their existing growth strategies.
In fact, today (18 September) sees New York-headquartered Dewey ramp up its London presence with the hire of project finance partner Stephen Jurgenson from Shearman & Sterling, where he was counsel.
Jurgenson will soon be joined by another lateral hire in Dewey’s London outpost, financial services counsel Abesh Chowdhury from Cleary Gottlieb Steen & Hamilton, where he was an associate. Project finance counsel Karen Goepfert is also relocating from New York.
Gander says the office remains committed to developing its finance capability and building stronger referral relationships with the firm’s Continental Europe network.
“Finance has been the primary UK focus in the past 12 months. That strategy continues no matter what happens,” says Gander.
Earlier this year Dewey revealed that it was abandoning attempts to build a London corporate practice and was set to return to its core strength in finance – although Gander still has the challenge of winning more lender-based work.
Meanwhile, Bartlam explains that Orrick is on an 18-month strategy to grow its London office, from 60 to between 80 and 130 lawyers, including corporate, private equity, structured finance, litigation and IP expertise to mirror its US team. Bartlam hints that the firm is keen to achieve such “balanced practices” in London through team acquisitions.
As revealed by The Lawyer UK 100 Annual Report 2006, Dewey has the larger London office of the two firms’ in terms of turnover, generating £20.3m in 2005-06, while San Francisco-based Orrick reported around £13m in London; but that figure will be boosted this year by the addition of Coudert Brothers’ London office, which joined last year. Orrick takes the lead on headcount with 60 lawyers, compared with Dewey’s 45 lawyers and nine fee-earners.
But while a merger with Orrick would undoubtedly strengthen Dewey’s structured finance offering, and Dewey would strengthen Orrick’s equity capital markets capability, it is questionable how far it will go towards quelling speculation over the stability of either firm’s European network.
Dewey has faced stiff criticism following a spate of partner losses, including the exit of three of its London-based English partners to Berwin Leighton Paisner. Meanwhile, Orrick overhauled its senior management structures in Europe and the US in March, an initiative partially driven by the need to integrate the teams acquired from Coudert and Rambaud Martel.
As a partner at a UK competitor said: “They’ve both suffered unbelievable staff turnover.”
Orrick does, however, have a successful history of merger and group acquisitions, having acquired the London and China offices of Coudert and merged with Paris firm Rambaud in the past 12 months.
But its success rate in the US leaves more to be desired after the failure of talks with Cooley Godward in 2003 and Swidler Berlin in 2004, both of which have gone on to find other merger partners.
Dewey’s involvement is also sure to have raised eyebrows at several UK firms, including SJ Berwin, which is known to have previously dallied with the idea of a transatlantic tie-up.
But insiders are quick to point out that the talks between Dewey and Orrick are at an early stage and numerous hurdles still need to be ironed out – not least of which is sure to be the combined firm’s name.