Penny for Penningtons’ thoughts on Manches

What can needy Manches bring to Penningtons’ party?

Manches’ financial decline is of long duration. Despite repeated attempts to reboot growth through management changes and cash-calls, 2012/13 proved a low point. Average profit per equity partner dropped by £100,000 to £135,000, while net profit fell to a 10-year low, dropping by 42 per cent from £3.7m to £2.15m.

By contrast, Penningtons saw net profit and average profit per equity per partner (PEP) climb steadily after 2008 before contracting slightly at the latest year-end – from £7.5m to £6.8m for net profit and from £301,000 to £275,000 for PEP.

The figures speak for themselves. Manches, a one-time leader in the family and real estate law, is looking to shore up its future with a Penningtons tie-up.

Market commentators are less than surprised by the move – after all Manches has been looking for a merger partner for some time. But what’s in it for Penningtons? Just two years ago the firm positioned itself as an acquisitor after a double merger with St Albans’ Wedlake Saint and Lincoln’s Inn outfit Dawsons. Sources suggest a merger with Manches may be a step too far.

“I’m honestly not sure what’s in it for Penningtons,” says a source. “Manches is a firm that seems to have been drifting for some time and the departure of family law partner Helen Ward to Stewarts Law [in September 2012] was the straw that broke the camel’s back.”

Manches will have to work hard to convince the market that this is a courtship of equals.