Giant mergers create international forces

By Anne Mizzi

Mergers producing one of the largest firms in the UK and Europe, and only the second transatlantic law firm, were unveiled this week.Leeds-based firm Hammond Suddards is merging with Birmingham practice Edge Ellison to create a top ten UK practice after only six weeks of serious talks.

Its 'shotgun wedding' announcement coincided with City firm Titmuss Sainer Dechert's announcement that its 'long engagement' with US firm Dechert Price & Rhoads is to be consummated.Titmuss will become the second UK firm to achieve a transatlantic merger after Clifford Chance and Rogers & Wells on 1 January.Hammond Suddards Edge will become the seventh largest UK firm when the two firms merge on 1 August.Hammonds Suddards' managing partner Chris Jones will become joint managing partner of the 185-partner firm, along with Edge Ellison chief executive Gil Hayward.

It is understood that Mr Hayward will be taking a back seat from his Devon base.

Partners will vote for a new managing partner in two years.

Mr Jones admitted it was a whirlwind courtship: 'Our first serious meeting was on 8 May.' The merger is billed as a platform for overseas expansion.

Mr Jones said the aim was to merge with firms in Germany, Italy, France and the Netherlands.

'We are going to be a lot more attractive toEuropean firms,' he said.

Both managing partners will be on the partnership board, together with three office heads from Hammond Suddards and Edge Ellison's senior partner and head of corporate.Edge Ellison insolvency head John Sullivan and banking partner Ian Reaves will lose their board positions.Mr Jones admitted Edge Ellison was not as profitable as Hammond Suddards, whose profit spread is between 100,000 and 450,000, but said Edge Ellison had recently instituted initiatives to improve profits per partner, which are believed to be in the 100,000 to 200,000 range.

Both firms have been through expensive rebranding exercises and will now have to repackage themselves as one firm.Titmuss' senior partner Steven Fogel will become London managing partner of Dechert, the firm created by the merger of 46-partner firm Titmuss Sainer Dechert and 167-partner Philadelphia-based Dechert Price & Rhoads, on 1 July.

Mr Fogel said the firms have been working on the merger, dubbed 'Project Rainbow', for a year after six years in an alliance.

'We had a long engagement, which we referred to as a "trial marriage".

[The Hammonds/Edge link-up] is probably more like a shotgun wedding.' Mr Fogel said Titmuss would be adopting the US system in the key areas of remuneration and accounting, because it wanted to achieve a 'deep merger' in which the partners would share profits and count cash in the same way.

As a result, it will ditch its lock-step pay structure and the accrual system in favour of cash accounting.

Dechert will be run by an international policy committee of elected representatives from various sections of the firm, and the US board will be enlarged.