Sources close to Andersens confirmed that the 77 partners' vote at Wilde Sapte which took place at the beginning of March, was "overwhelming", and heads of agreement have now been signed.
And, subject to the normal due diligence taking place - i.e. checking out the other side's business in detail, and all sides agreeing, the deal is expected to be completed by 1 September.
This could eventually form an international legal and accountancy network that includes Wilde Sapte's offices in London, Brussels, Hong Kong, New York, Paris and Tokyo, the largest law firm in Scotland, Dundas & Wilson, several regional firms in England, including London, currently practising under the name of Garretts, as well as access to all the resources of the existing international Andersens' accountancy practice and its foreign law firm network, which includes J & A Garrigues, the largest law firm in Spain, and practices in France and Germany.
In effect, with a City law firm as the jewel in its crown, Arthur Andersen will have the perceived perfect vehicle and resources to provide global multi-professional services. With Wilde Sapte included, the Andersen network would have about 1,400 lawyers practising in about 30 countries worldwide.
Although one player in the same market confessed that he was "astonished" at the decision, he also adds that it is "inevitable, the same thing is already happening from Chile to Malaysia and Hong Kong, as well as Europe - it's a global phenomenon."
Lawyers and accountants may be seen as rather strange bedfellows. There are a number of issues raised by their linking up which range from a lack of synergy and no tangible benefit for either side, to the potential for conflicts of interest with clients in common or as adversaries, as well as the different cultures that the two professions have, with the lawyers claiming that they have higher ethical standards. And, as one in-house lawyer asks: "What if the best advice the lawyers can give is to sue the accountants?" But if those difficulties can be overcome, the vision is for a huge global legal-accountancy-consultancy practice. Andersens has been the most aggressive in putting this vision into practice in both the UK and worldwide, with presences in Spain and the Netherlands. Garrett & Co (now Garretts) was originally set up five years ago as Andersens' associated law firm, and now has almost 400 fee- earners. It scored a coup last year when it tempted the largest Scottish law firm Dundas & Wilson into its its legal network, which took the merged Garretts and Dundas & Wilson into the Top 20 of UK law firms by fee-earner size.
It is no secret that Andersens was looking for a major City legal player to strengthen its network - its talks with Simmons & Simmons lasted almost a year, but broke down last year. One observer comments that "one of the reasons for the non-merger was the failure of Andersens to appreciate that lawyers like to be lawyers and not part of an accountancy practice, no matter how large and successful". The fact that only a limited number of the law firm's partners would also have been partners at Andersens was seen as a factor, as was the fact that a number of Simmons & Simmons partners were against the move when its clients opposed it. Simmons & Simmons would not comment on this latest development.
Wilde Sapte's managing partner, Steven Blakeley, says that "although the partners have voted overwhelmingly in principle to an arrangement with Andersens", he stresses that "it's important that we consult with our clients and take their views into account. And although it is a bit early to comment on the details, the decision obviously marks a very exciting possibility for change in the legal marketplace."
As for speculation on whether Wilde Sapte name would be used for all Andersens law firms, a source close to Andersens says: "Nothing has been decided - Wilde Sapte is recognised as being strong in banking and asset finance, but Garretts also has a strong brand name, and it would be stupid to lose that.
"It is no secret that ideally, there should be a move away from both names with the end game being for all the firms to come under the name of, probably, Andersen Legal or Andersen Tax and Legal - and as soon as it is possible, that will happen. That would solve a lot of problems because clients don't care about names, they want individuals."
Price Waterhouse's European law firms managing partner Paul Downing sums up the reactions to Wilde Sapte's decision: "This gives Andersens a top class financial practice from which to build a global business. I have the highest regard for Mark Andrews [senior partner] and Steven Blakeley [managing partner] at Wilde Sapte - they had the vision to reshape Wilde Sapte and cut out the unprofitable lines and imported talent to plug the gaps. With Andersens' resources behind them, they can now realise their ambitions."
From the perspective of other law firms, Freshfields managing partner Ian Terry says: "It is another building block for Arthur Andersen and it will probably make strategic sense for Wilde Sapte but the combination will have little if any short-term impact on the practices of the major law firms. The market is already intensely competitive and we have to be ready to compete against all-comers.''
But the urge to merge seems inevitable - from within the Big Six accountants and law firms themselves to the FTSE 100 companies - the rise in cross- border deals means that if the advisers already have the beancounters and legal experts in place, they can win and keep that business. And with the insolvency advisers waiting for the inevitable fall-out from the Far East - money problems means restructuring work for both lawyers and accountants - it seems more accountancy-legal or just legal marriages will be in the air (admittedly from a limited pool of suitors), and not just because it's Spring...Reuse content