denotes premium content | Aug 21 2008 Managing Partner archive
Volume 9 Issue 7
Editor's Letter
A number of legal commentators have previously alluded to the similarities between a merger and a marriage, but it is a comparison that remains compelling. Both fusions require a close meeting of minds and values, and neither is a decision to be taken lightly. If anything, the metaphor seems even more pertinent in 2006, as the ‘high risk’ associated with marriage failing has hit the headlines a number of times in the last 12 months – and not only because of a stream of high-profile celebrity splits.
In May this year, two ex-wives won divorce settlements in what were judged to be ‘landmark’ rulings by the House of Lords. Dubbed the ‘big money’ settlements, the Lords ruled that ex-solicitor Julia McFarlane was entitled to ₤250,000 a year from her ex-husband for life as she had given up a high-earning career to care for their children. In the second case, Melissa Miller was awarded a total of ₤5m from her ex-husband, even though the marriage was recognised as brief. In August, insurance magnate John Charman was then ordered to pay his former wife ₤48m in what is believed to be the largest settlement of its kind in legal history. Charman predictably branded the ruling unfair, saying he had already made a ₤20m offer, “impossible for any reasonable person to spend in their lifetime”.
Like a marriage, a business merger is a relationship that calls for caution – very costly if it backfires. The right partner is essential and firms need to take the time to find the most compatible match, with due diligence carried out to the highest possible standards. It is widely expected we will see a continuing trend of consolidation in the legal market in the coming years, particularly in the mid-tier. And a likely increase in competition among firms post-Clementi/Carter may make the merger option more attractive – perhaps even necessary. A recent report from economists LECG estimated around 800 legal-aid firms may find they have to merge if Lord Carter’s reforms to legal aid go ahead without any additional investment.
A number of features in this issue of Managing Partner highlight the challenges associated with the merger process. They stress that cultures and values must match as well as profits and systems, although IT infrastructure should certainly be one key consideration. Firms may have different ideas and preferences for matter-centric solutions and technology, for instance – an area we explore in this issue’s Special Focus (p 53).
But some have gone so far as to question the sense of marriage at all if the potential pitfalls can be so great, and it’s similarly clear that merger isn’t for everyone. There is something to be said for independence – in business as well as personal relationships – and law firms can form ‘best friend’ relationships or other international alliances that may well serve them better than being exclusively bound to one partner.
The inevitable risk aside, however, this is a time of year for looking forwards. UK top-30 firm Richards Butler is eagerly awaiting its New Year’s Day unification with Reed Smith (p 15), while Hill Dickinson and Hill Taylor Dickinson remerged last month as their respective strategies are now better aligned than when they went their separate ways in 1989 (p 20). Their respective managing partners were acquainted from before the demerger, which helped drive the process through to a satisfactory conclusion.
And here at Managing Partner we are looking forward to the prospect of a relaxing Christmas and a prosperous, stimulating start to 2007.
I would like to wish all our readers the same.
Richard Brent
Editor
Features
Country focus: Investment options in the UAE
Richards Butler LLP looks at the legal framework for inward investment in the United Arab Emirates.
Country focus: Two models of Takaful
Norton Rose examines the regulatory approach to Takaful in Bahrain
Country focus: Construction in Dubai and the UAE: exciting times
The Dubai construction sector continues to boom, offering significant opportunities for lawyers in the region. But they need to be alert to the ways in which the industry is changing.
Country focus: Property prospects in Dubai
Law firm Holman Fenwick and Willan provides an overview of commercial property considerations in the emirate of Dubai.
Country focus: Commercial Agencies Law
Long awaited changes to the UAE Commercial Agencies Law have now been enacted. However, how has the new law modified the old provisions and how likely are the new changes to have a significant impact on those entering into agency agreements in the UAE?
Country focus: Arbitration in the Middle East
Businesses in the Middle East are increasingly seeing the advantages of arbitration over litigation. This demand has led to widespread arbitration law reform, so an understanding of national legislation and the Rules of local arbitral institutions is vital.
Country focus: Investing in the future of finance
Bahrain has been the financial capital of the Middle East for more than 30 years. But the kingdom realizes it cannot be complacent, and is raising its game further to ensure it maintains and builds upon its leading position.
Special focus: Enhancing the e-environment
SJ Berwin decided to take matters online for paperless efficiency and email management. By Dave Packer, director of professional services marketing, Interwoven
Special focus: When matter matters
Matter-centric working is at the very heart of Evolution InSight and The Partnership Suite solutions from CS Group. By Jim Chase, managing director, CS Group AIM.
Special focus: Effective integration matters
The idea behind matter-centric practice-automation solutions is deceptively simple: create a centralised repository of all information related to a particular matter and make that information readily available to authorised users. By Bryan Roberts, vice president of international sales, Aderant
Special focus: Business-centric computing: new tools for a new age
The main problem is that managing matters is just a facet of the modern legal business: managing that business calls for active control of all entities, both legal and non-legal. By Stuart Holden, managing director, Axxia Systems
Special focus: It’s multiple views that matter
The legal profession is feeling the heat – commercial, client and legislative pressures mean the race is on to hone competitiveness, responsiveness, efficiency and agility. By Doug McLachlan, marketing director, Axxia Systems
Special focus: Matter-centric solutions survey 2006
Managing Partner conducted an in-depth survey into matter-centric solutions, asking firm for their views and objectives in this pivotal area of practice management.
Case study: Expanding the global footprint
With some 70 per cent of its work cross-border and offices from Brussels to Beijing, top-30 UK firm Richards Butler has long held ambitions to extend its international presence even further. On 1 January 2007, the firm will merger with top-25 international firm Reed Smith.
Profile: DWF
The Legal 500 recently ranked top-100 law firm DWF as one of the North West’s ‘regional heavyweights’. In January Andrew Leaitherland became its first ever managing partner as part of a firm-wide strategic review.
Opinion: Beyond the obvious in international mergers
Without doubt, every law firm possesses a distinct organisational culture, and that culture influences the firm’s success.
Case study: Life after lockstep
Lawyers value their personal autonomy especially highly. But with alternative business structures now on the horizon, a number of firms face the need for a more streamlined and transparent management structure. Offshore firm Mourant found getting buy-in for performance-based remuneration posed one of the greatest challenges.
Cover story: Taking on the world
Pressure to consolidate and expand global reach is forcing law firms to re-examine their international strategies. But many firms also fiercely stress the value of their independence.
Talent spotting
Bond Pearce decided to implement a rigorous assessment procedure for its associates. They wanted to identify potential partnership material as early as possible, but the challenge was to get firm-wide buy-in for the process.
