Bonny for Clydes?

In the end – if this is the end – Barlow Lyde & Gilbert (BLG) simply looks to have run out of options. As our lead story reports, partners at the firm are understood to have been told months ago that BLG would soon not exist and that a merger was the only option.

Over the years BLG has lost too many partners, too many clients and too much international ­coverage – most recently with the departure of the aviation team that joined Holman Fenwick Willan in March – to make carrying on viable.

Yes, its 2010-11 results were good, but that’s ­probably more a result of getting knocked into shape for a merger than a potential hurdle to achieving one.

That’s not to say a deal with Clydes is a fire sale. BLG isn’t quite on the ropes yet. Any deal with its major rival would turn the UK legal insurance ­market on its head.

As BLG chief executive David Jabbari puts it, “The spirit of these discussions with Clyde & Co is a bold, innovative and offensive one which shows once again the enormous ingenuity of UK law firms and their ability to redraw the competitive map.”

In footballing terms this would be Manchester United merging with Liverpool. For many of BLG’s senior people the intense rivalry between the two for years means a merger with Clydes would be the last option. That partly explains the shock this news generated in the market when it began ­breaking last Friday (3 June).

The surprise also stems from the extent to which this deal could be a real game-changer for both firms. Sarah Clover’s professional indemnity ­practice at BLG in particular remains a jewel, the firm’s Hong Kong litigation group is strong, while strategically the deal would gift BLG a (relatively small) ­footprint in the US. The firm’s talks with US firm Locke Lord Bissell & Liddell in 2007 failed to ­provide that outlet, but as Jabbari admits, BLG continued researching potential US mergers.

Despite some approaches from smaller US firms, nothing came of it. Now that might change by ­putting the two firms together, and the UK could be about to see a serious new player. But it’s hard to see this as anything other than a coup for Clydes and defeat for its number one rival.;