Six De Bandt partners defect over Linklaters merger doubts

Belgian firm's managing partner leads mass breakaway as mid-size clients prove a sticking point

Belgian firm De Bandt Van Hecke Lagae & Loesch has suffered a dramatic six-partner defection over fears that the firm's merger with Linklaters & Alliance will fail to give Belgian clients the full service they demand.
Linklaters' former chief executive Terence Kyle has hit out at the defectors, saying that their concerns were just “bleating”.
In a double blow to the firm, the breakaway group of six partners is led by De Bandt managing partner Roel Nieuwdorp. A highly-rated corporate lawyer, Nieuwdorp was instrumental in the merger negotiations with Linklaters and in the creation of the European alliance. He stood to be at the top of the merged firm's pay scale.
Nieuwdorp has been replaced by Antwerp-based corporate partner Jean Pierre-Blumberg.
The breakaway group will join Benelux firm Loyens & Loeff, where Nieuwdorp will take on the role of joint managing partner for Belgium with Christian Chéruy. The other partners moving with him are labour law specialist Carl Bevernage, corporate partner Wilfred Goris, corporate litigators Martine de Roek and Dirk Slagm-olena, and competition partner Koen Platteau. Their move adds a new dimension to Loyens & Loeff, which currently has only a tax practice in Belgium.
The group made its decision ahead of the votes in Belgium and the UK on Wednesday 12 September in favour of the merger. The departing partners were still entitled to vote, but declined to participate. Other fee-earners are also expected to make the move to Loyens & Loeff with them.
Nieuwdorp said that he had always made his philosophy clear and had tried unsuccessfully to combine his preferences with the merger process.
“I've always believed in decentralisation and differentiation,” he said. “I have a different view to those in favour of centralisation and uniformity.”
Nieuwdorp's ultimate rejection of Linklaters' proposals hinged on his fears that medium-sized domestic corporates would be neglected in favour of Linklaters' global clientele.
“I've always believed that the practice should remain broad enough to serve middle-sized companies,” he said. “In a relationship firm you try to make sure you can handle all types of problems, even if they're not the most fashionable or interesting.
“If [Linklaters] has issues about whether that's profitable or not, that's where a difference of opinion exists. I'm saying that whatever the level of profit is, you don't need the highest level of profit as long as you have a practice that is profitable enough for your own domestic market.
“I don't want to pretend that money is not important, but it's a different approach as to how important it is. I still believe very strongly in the need for a small country to operate on an international level with the right international capabilities, but what I would not accept is that the only way to do that is to merge and become a global firm.”
Nieuwdorp said he also feared that the merged Belgian practice would not have the control and independence to determine how it practises in its own market.
But Kyle at Linklaters, who is now managing partner of the Americas, criticised the group for not waiting long enough to find out what the merged firm would be like.
“I think the real reason they left was that they didn't want to change the way they are at the moment,” he said. “This business about central control is just bleating. They have to justify taking this radical step to themselves and refuse to believe what they know to be the truth.
“There's a greater degree of uniformity across Linklaters in terms of financial control, but everybody doesn't have to do the same thing.”
Kyle said the group's concerns about how the practice will service domestic clients did not “hang up”, because their colleagues doing the same work had voted to join Linklaters with enthusiasm.
“There might have been a profitability issue, but they didn't wait to find out,” added Kyle.
But Kyle did admit that the work targeted by the practice would change.
“We'd certainly expect them to service Belgian client business at the top end, but we wouldn't want them to do everything for those clients,” he said.
Under the terms of the merger agreement, 47 De Bandt partners will join the Linklaters partnership on 1 January 2002.