Private investigators brought on board to stop leaks of potential merger partners

Theodore Goddard has hired a crack squad of private investigators to snoop on partners who may be leaking confidential information about the embattled firm.

The firm is in highly sensitive pre-merger discussions with a clutch of City and US firms, which have all said they will terminate the talks if their identities are revealed.

Only a small cabal of partners know who the firm is talking to, but the private investigators were hired last month after some information leaked out.

Theodore Goddard senior partner Paddy Grafton Green is currently leading a small management group – including chief operating officer Nigel West and banking partner James Ballingall – which is scouting around for a merger partner.

Grafton Green has been told by all the firms he has approached that if their identities are revealed, even to the Theodore Goddard partnership, they will refuse to enter full-blown merger discussions.

The Theodore Goddard partnership will find out at the end of January who the interested parties are, and will then vote on how to progress.

All the firms Grafton Green and his team have approached are part of a shortlist drawn up by Theodore Goddard’s consultants Hildebrandt.

Grafton Green told The Lawyer: “Through Hildebrandt, we’ve got a shortlist of firms in the US and here, and we’ve been to talk to them initially. They’ve said, ‘You can come and talk to us, but we can’t confirm details of any agreement and we don’t want a situation where this information becomes public knowledge’.”

Grafton Green said that when partners find out at the end of January who they are able to enter merger talks with, this will boost morale at the firm, which has suffered the loss of at least 14 partners this year.

In the last three weeks Theodore Goddard has suffered the defection of former managing partner Peter Cooke, employment partner Jane Bullen and corporate partners Paul Salmon and Graham Stedman to its old merger beau Salans. Head of banking Michael Black and senior banking partner Jayesh Patel have also just resigned to move to Denton Wilde Sapte.

But Grafton Green admitted that some partner losses were due to enforced resignations.

“Some people left because of the fallout from Salans, but we’ve also asked some people to leave,” he said. “We haven’t had to use the partnership agreement to enforce this, but have sat down with people and said we didn’t think their business was working out.”