Dundas & Wilson will exit its Aberdeen and London bases early in preparation for the launch of its merger with CMS Cameron McKenna next week (1 May).
Dundas’ Aberdeen and London partners will move out of their current premises and into CMS’ offices in the London and Aberdeen over the May Day bank holiday weekend, even though the firm’s London lease will not expire until 2015.
There is no break clause in the London lease and the same is thought to be true of the Aberdeen property, meaning the firm will continue to pay two leases for a year.
It is understood that the London office payments would not be onerous due to a deal struck in 2008. However the strength of the Aberdeen property market means that an ongoing obligation in the city could be a bigger challenge.
“Abderdeen is a crazy office market,” said one source. “You don’t want to be sitting on any legacy office in Aberdeen, London is a great deal because of a negotiation back in 2008, in terms of what other firms are paying in the city it’s far less.”
Another source commented: “The lease on Aldwych runs out in a year’s time but the sooner you get everyone together to start working together the better.”
The merger deadline on 1 May will put an end to the Dundas brand in both Glasgow and London, when all partners will be absorbed into CMS’ offices (12 December 2013). Dundas & Wilson will retain its name in Edinburgh and Glasgow for a transitional 12-month period.
Dundas opened its Aberdeen office in 2012 with the aim of honing in on oil service transactions and those connections are said to have been important to CMS when it decided to merge. Partners Doug Crawford and Davidson led the office launch at 11 Queen’s Gardens two years ago and will move to CMS next week.
One source said that the key Aberdeen partners would be “in clover” following the move but expected London to experience a tougher ride. The capital has been the site of the majority of partner exits in recent years. Real estate disputes partner Andrew Walker was the most recent to leave, at the end of last year (8 January 2014).
That followed the exits of one of the firm’s top litigators, Martin Thomas, who jumped ship for Wragge & Co in 2012 as well as banking partner John Pike, who went to Osborne Clarke with real estate partners Shane Toal and Nick Padget. London-based TMT partner Paul Graham also left for Field Fisher Waterhouse while private equity duo Simon Sale and Nadim Meer went to Mischon de Reya (9 April 2013).
However the office still retains important connections to clients like the National Grid and Land Securities.
The past few months have seen both sides engaged in a flurry of meetings between practice groups and presentations and pitches to shared clients. Both are in understood to be negotiating client relationships with RBS, National Grid and Clydesdale Bank among others (17 February 2014). Last month the firms also put in a joint bid for Scottish and Southern Energy’s panel when the review kicked off (20 March 2014).
Corporate partner Kenneth Rose, who manages the firm’s vital relationship with the Royal Bank of Scotland, is thought to be talking to the bank ahead of he mreger. CMS also has a spot on the bank’s roster and is said to be hopeful that its new tie-up with Dundas will give it more work – a prospect said by commentators to be key to the deal.
As part of the merger, it is understood that all partners have been given a 12 month job guarantee. The majority of partners have not been given remuneration guarantees and are not locked in the firm has agreed not to give anyone notice for 12 months.
All the Dundas partners are joining tiers one and two of the CMS equity 28-70 point equity ladder. The firms have not confirmed what level Dundas’ full-equity partners, which make up the majority of its partnership, will be joining but sources said they were unlikely to be given full equity stakes in the merged firm.
Nine partners at Dundas were guaranteed salaries of £280,000 as part of the merger deal but the firm’s top-earning partners take home a much lower sum than their CMS counterparts (27 January 2014). Last year the highest-paid partner at CMS took home £1.13m (16 January 2014).
The firms are also bringing to an end a redundancy consultation for its support staff which puts 60 jobs at risk (21 March 2014).
Even after the move, the London partners will not be staying put for long. CMS is due to move into new offices in the city in 2015 after signing a deal to move into Cannon Place (10 April 2013).