Matchmaking for survival

Size, it seems, is everything. With the merger of Dibb Lupton Broomhead and Alsop Wilkinson making Dibb Lupton Alsop – now the largest firm in the North West in fee-earner numbers – the issue of critical mass remains one of the main considerations for success and survival in the legal market.

The merger has excited comment that it is the joining of “two quite different animals” and so rather unusual. The traditional dyed-in-the-wool firm Alsops linking up with the comparative newcomer and more “aggressive” Dibbs seems an unlikely marriage.

One lawyer in the region says being “the biggest firm in the North West (effectively Manchester and Liverpool) does not necessarily mean that much, although it is a nice peg to have”, while another says “the two different cultures could be a good thing, widening their base, as well as increasing competition within the region.”

Fortunately, this is also the view of Paul Nicholls, the regional managing partner of the merged firm in the North West. “The impact will be good for the region and also for the legal market as a whole. It means that North West-based plcs and businesses now have a genuine choice and don't have to go to London at all.”

As has been the case nationally, there have been a number of mergers the past year, including Mace & Jones with Grundy Kershaw & Bowden. Silverbeck Rymer has expanded both through merger and organic growth, and the long-rumoured dating of Addleshaw Sons & Latham with Booth & Co remains unconfirmed, while the recent added twist of a menage a trois with Vaudreys is a “non-event”, according to a Vaudreys spokeswoman.

Addleshaws managing partner Paul Lee says that he no longer comments on such speculation. On Dibbs and Alsops he says: “Overall, I believe that this merger can only serve to raise the profile and strengthen the reputation of the North West law scene on national and international levels. The move is sensible, and will undoubtedly intensify competition.”

In fact, even what would be considered the usual disadvantage of a merger – the loss of clients due to a conflict of interest – has been “negligible” in the Alsops and Dibbs case, and the generally held view is that a further heavyweight merger would benefit the region.

Guy Wallis, head of the property department at Davies Wallis Foyster, considers that “with the increase in the number of mergers and growth in size of law firms, loss of clients to a conflict of interest will probably become less of an issue for clients if, in practical terms, matters can be kept at arm's length”.

He agrees that the impact of the merger will essentially improve matters in the North West because of the “IBM” factor and the perception that clients can get quality and more cost effective service. He adds that it is a “chicken and egg” situation – “as business, legal and otherwise, grows in the regions, it makes sense to merge”.

Apart from mergers, there is continual activity within the major players. For example, personal injury insurance partner Stewart Harper will be joining Halliwell Landau from Lace Mawer in December, and Halliwells senior partner Roger Lancaster says that lateral hires have been a major contributor to growth in all law firms.

Many of the practitioners in the region are “pretty bullish about UK plc”. With reports that many City firms are looking for international opportunities, regional firms are also seeking business worldwide.

There are also increasing numbers of overseas companies investing in the UK's regions. But as Lace Mawer's senior partner Gordon Jeffrey says: “It is not just on size that there is competition – we have to compete on quality too.”