Law: A case of merger in the first degree

The trend is for the creation of new legal giants, but is it one that firms will be wise to follow?

OLD LAW firms never die, it seems, they just get engulfed by larger firms, or merge to become twice the size. A number of centuries-old firms have been more than willing recently to be swallowed up in a bid to achieve the much-vaunted ideal of critical mass and added value of management speak.

One well-established firm of City lawyers, Frere Cholmeley Bischoff, which was founded in 1750, has decided to throw in its lot with national firm Eversheds. When the merger takes place on 1 August, the new firm Eversheds and Frere Cholmeley will be the largest in the UK, with 322 partners and 988 fee earners, overtaking Clifford Chance, which has 1023 fee earners in the UK.

Clifford Chance itself is the result of the merger of Clifford Turner with Coward Chance in 1987 to form London's largest firm. How long that ranking will last will depend on how successful Clifford Chance is in putting in place its announcement earlier this year to double the number of its lawyers in Europe. The perception of Clifford Chance and Eversheds is also very different, with the former seen as one of the Big Five City law firms, and the latter sometimes unkindly referred to as a UK McDonalds of the legal profession, but that image has been changed recently with Eversheds getting US chemical giant DuPont as one of its clients after a "beauty parade".

It seems that the urge to merge is irresistible, even at the expense of losing a long-standing name. The 213-year-old Wilde Sapte has just narrowly avoided losing its independence and name now that the merger with Arthur Andersen is off, but it is seeking another merger partner.

Keith James, Eversheds' executive chairman comments: "Merger should not be an end itself. It should only take place if it is the best way of developing the firm. For some firms, it may be better to grow organically, particularly those with niche practices. For mergers to succeed the cultures of the two firms must be compatible. They must have similar ambitions. The breakdown of talks between Arthur Andersen and Wilde Sapte illustrates this."

But even the route to the Eversheds/Frere Cholmeley deal - and what will essentially be the demise of 248 year old Frere Cholmeley - was not a smooth one. The background to the story is the boom period of the 1970s and 1980s, when Frere Cholmeley's debt problems arose from expansion in London and overseas in Barcelona, Berlin, Dubai, Milan and Moscow. In a bid to stem the tide of its lawyers leaving over the last five years, it did what many businesses do - it called in the management consultants, in this case Hodgart Temporal.

Such a move almost always leads to drastic measures, but Hodgart Temporal director Alan Hodgart stresses that three-quarters of his law firm clients do not have to take drastic measures, and in this case the report was that Frere Cholmeley did have viable strategy prospects.

The advice was to focus on four core areas - financial services, media and entertainment, property and eastern Europe - and having carried out that exercise, the consultants were called back in to advise further on whether or not to merge and with whom.

Eversheds' London managing partner Peter Scott and Frere Cholmeley's managing partner Alan Jenkins met at a dinner last year, and the merger was announced last month.

But it is not simply a matter of Eversheds and Frere Cholmeley riding off into the sunset as the UK's legal giant - there has also been a breakaway firm from Frere Cholmeley called Forsters which will be based in Mayfair and will have 11 partners and 44 lawyers covering property, private client and corporate/media work. Other partners are leaving to join other firms in the City - Bird & Bird, Osborne Clarke, Denton Halland Field Fisher Waterhouse.

That has fuelled speculation as to whether the clients will stay with Frere Cholmeley. It is thought that Elton John, who is a client of Frank Presland (who will be joint senior partner post-merger) will stay, and the firm also has other high profile clients, including Warner Music and McDonalds. The management consultant's advice as to keeping clients is that the merger partners have to make a business case to the client: "If the business logic is there, the business people will see it."

Rumours of other mergers are rife in the City - mergers of law firms with other law firms, and also with firms of accountants. But Hodgart says that although Frere Cholmeley's financial position was "somewhat unique, there are a number of London firms which are already considering merger to reach perceived strategic goals. The problem is that sometimes it makes much more sense for firms to split into two".

Arts and Entertainment
Call The Midwife: Miranda Hart as Chummy

tv Review: Miranda Hart and co deliver the festive goods

Arts and Entertainment
The cast of Downton Abbey in the 2014 Christmas special

tvReview: Older generation get hot under the collar this Christmas

Arts and Entertainment
Dapper Laughs found success through the video app Vine

comedy Erm...he seems to be back

Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)

tvReview: No ho-ho-hos with Nick Frost's badass Santa

Arts and Entertainment
Bruce Forsyth and Tess Daly flanking 'Strictly' winners Flavia Cacace and Louis Smith

tv Gymnast Louis Smith triumphed in the Christmas special

PROMOTED VIDEO
Arts and Entertainment
Rhys says: 'I'm not playing it for laughs, but I have learnt that if you fall over on stage, people can enjoy that as much as an amazing guitar solo'
musicGruff Rhys on his rock odyssey, and the trouble with independence
Arts and Entertainment
Krysia and Daniel (Hand out press photograph provided by Sally Richardson)
How do today's composers answer the challenge of the classical giant?
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
News
Shenaz Treasurywala
film
News
tv
Arts and Entertainment
Jason Watkins as Christopher Jefferies
tv
Arts and Entertainment
Star Wars Director JJ Abrams: key character's names have been revealed
film
Arts and Entertainment
Pharrell Williams won two BBC Music Awards for Best Song and International Artist
music
Arts and Entertainment
Mark, Katie and Sanjay in The Apprentice boardroom
TV
Arts and Entertainment

Film The critics but sneer but these unfashionable festive films are our favourites

Arts and Entertainment
Frances O'Connor and James Nesbitt in 'The Missing'

TV We're so close to knowing what happened to Oliver Hughes, but a last-minute bluff crushes expectations

Arts and Entertainment
Joey Essex will be hitting the slopes for series two of The Jump

TV

Who is taking the plunge?
Arts and Entertainment
Katy Perry as an Ancient Egyptian princess in her latest music video for 'Dark Horse'

music
Arts and Entertainment
Dame Judi Dench, as M in Skyfall

film
Arts and Entertainment
Morrissey, 1988

TV
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all