Merger talks between Theodore Goddard and Salans Hertzfeld & Heilbronn have collapsed.
Both firms insist that the decision was mutual, but offer different reasons for the breakdown: Theodore Goddard cites concerns about the international economic uncertainty accelerated by the attack on the World Trade Center; Salans says it has decided to focus on building up its own international offices. However, neither firm has ruled out resuming the merger talks at a later date.
The decision did not go to a partner vote, neither was a date set for the vote, said Theodore Goddard managing partner Peter Cooke. There were informal discussions with partners on both sides, but Cooke said the decision to terminate the talks came from the top. Finer details, such as partner remuneration within a merged firm, had not been discussed.
In this year's The Lawyer 100, Theodore Goddard reported profits per partner of £420,000. Salans does not disclose its profits.
According to Cooke, both firms informed their partners of the decision early last Thursday morning (20 January).
The Salans merger would have given Theodore Goddard access to the key jurisdictions of Paris and New York. But after the collapse of the talks, Theodore Goddard's international strategy remains unclear.
Cooke said: “Time will now tell what our international strategy may be. We're not talking to any other international firms; neither are we looking to set up best friends relationships, either with Salans or any other firms in international jurisdictions.”
“We're not talking to any other international firms; neither are we looking to set up best friend relationships, either with Salans or any other firms in international jurisdictions”
Peter Cooke, Theodore Goddard
Salans denied that its plan to build up its own international practice was one that conflicted with Theodore Goddard's own expansion plans. “We're now choosing to build up our international practice areas, but this was never an issue in the merger talks,” said a spokesperson for Salans.
Salans also denied that the merger talks foundered due to the fact that its leaning towards banking and finance work in London would not have fitted well with Theodore Goddard's growing media practice.
“Although we're known in the UK for banking and finance, internationally we have a very strong intellectual property and technology, media and telecoms practice, which would have married well with Theodore Goddard,” said the spokesperson.
However, the firms will continue to share clients, a practice that has expanded since the merger talks began at the end of last year.
“We still have a lot of files open and will continue to be the best of friends,” said Cooke. “Working together on international clients has been positive and we intend to continue the relationship. We haven't ruled out resuming the merger talks in the future.” He added that, although the firms would continue to cooperate, there were no plans to carry out joint marketing or pitches at the moment.
It is not the first time that Theodore Goddard has pulled out of merger talks – it turned down Eversheds by one vote in 1993 and then saw the collapse of tripartite talks with Denton Hall and Richards Butler in 1998.
Salans has been more successful at the negotiating table – it married Wall Street firm Christy & Viener in 1999 to form the first transatlantic merger.