Lawrence Graham and T&L” />Lawrence Graham is in advanced discussions with Tite & Lewis (T&L), the former law firm of accounting giant Ernst & Young (E&Y).
T&L was cut loose by E&Y last April, but secured extremely favourable terms in the separation agreement, including a write-off of an overdraft which, as revealed by The Lawyer (8 March 2003), stood at £22m last March.
When T&L split with E&Y, the firm haemorrhaged some of its best lawyers, including banking partner Charles Proctor and M&A specialist Andrea Cropley, who both moved to Nabarro Nathanson. However, it still has five partners: name partners Christopher Tite and Mark Lewis; e-commerce partner Jon Edgell; competition partner James Robertson and real estate partner Louise Gowman.
The e-commerce group is widely regarded as the jewel in the depleted firm’s crown and has retained some good clients, including Lloyds TSB. The firm has around 20 lawyers and a further 20 staff, all of whom are expected to move with the merger.
T&L occupies property leased by E&Y on Noble Street in the City, although it is unlikely that Lawrence Graham would be lumbered with property costs. As part of the separation agreement, E&Y agreed to take back the property if T&L sealed a merger within a year.
A source close to T&L added that under the separation agreement, E&Y would have been willing to wind up T&L as a solvent concern a year after separation if the firm had not found a suitable merger partner.
Negotiations are likely to centre on remuneration. When T&L was linked to E&Y, Tite and Lewis were paid £650,000 a year plus bonuses, but top of Lawrence Graham’s equity is £615,000. However, while linked to E&Y, Lewis and particularly Tite spent much of their time managing rather than practising.
Lawrence Graham senior partner Bill Richards said: “We’re in merger talks with Tite & Lewis. Nothing is finalised at this stage.”
An E&Y spokesperson said: “Neither E&Y nor T&L will comment on market rumour.”