DONN & CO AND CONN & CODonn & Co was a seven-partner law firm with a reputation for personal injury and uninsured loss recovery work.

It is now best known for its representation of over 700 Gulf War veterans who are fighting for recognition of the condition called Gulf War syndrome.

Raymond Donn, senior partner at Donn & Co, is responsible for the firm's expansionist policy.

By 1995 he had become convinced that the only way a provincial law firm could survive was by offering 'specialist niche services'.

Mr Donn says: 'I was comfortable with the size of the practice for the following two to three years but I knew within the next ten years we would have to grow to survive.'In July 1995 Donn & Co had merged with a smaller Manchester practice.

This had been very successful and Mr Donn instructed his accountants, Touche Ross, to look for another larger niche practice.

Shortly afterwards Mr Donn was contacted by Ian Morris, a senior partner at intellectual property specialists and Manchester neighbours Philip Conn & Co.Conn & Co was not one of the firms to be contacted by Mr Donn's accountants, but they had picked up merger signals from the publicity surrounding Donn & Co's previous merger.Mr Donn says: 'After Ian came to see me we both realised there would be mutual benefits for both firms if we started talking properly.'Donn & Co was very keen on Conn & Co's highly respected IP practice and Conn & Co was aware that it needed the resources and backing which would accompany the merger with a larger firm.The next step was a more structured meeting between the two firms in the shape of Mr Donn and head of the commercial department Joe Glass and senior partners Philip Conn and Mr Morris.At the same time, the accountants P Touche Ross for Donn & Co and Alexander & Co representing Conn & Co P conducted their own negotiations.Mr Donn believes the use of accountants is an essential element in any merger negotiation.

'There is a risk in merger deals of letting your heart rule your head.

The accountants provided us with first class objective advice, identifying factors we had not taken into account.' The accountants also gave important advice on tax considerations and contractual warranties.

By Christmas it had become clear that this was a merger that could work.

Mr Donn says: 'A merger is like an arranged marriage.

Each firm has its own culture.

Throughout the merger talks I was constantly envisaging how the Conn lawyers would match up with my own team and making sure that the chemistry was going to be right.'On 13 February all of the partners from both firms met for the first time to see how this chemistry would work in practice.

'It went very well indeed,' says Mr Donn.

The merger documentation was signed the same day.The two firms merged on 1 March forming a firm with 11 partners and 75 fee-earners.

Just before the merger Donn & Co claimed that it would be able to offer clients a full commercial service and compete in 'beauty parades' for work with some of the larger national firms.

At this time Mr Donn explained that this was just one of a number of niche mergers being planned.

He added that he expected the new firm to merge again within the next six months.However, as soon as the two firms began the full integration process the points of incompatibility started to appear as Donn & Co decided the merger could not last.

Donn & Co acted swiftly, instructing leading counsel and taking further advice from its forensic accountants.On 27 March, following liaison with the Law Society, Donn & Co served notice to rescind and the merger was formally broken up.

Mr Donn explained that, however prudent your preparation, it is only when you sit down round a table and actually start to work with the other side's staff that you really know whether things will work out.Mr Donn said that it was fortunate that the firm had not moved into a new building which was planned to accommodate the merged firms, and that full integration had not taken place.

However, he accepted that the merger has cost his firm money which it is unlikely to recoup.It appears that Conn & Co was equally unhappy with the arrangements.

Senior partner Philip Conn says: 'There were different cultures.

Each had expectations of the other which I do not think would have been fulfilled, so we decided to go our separate ways.' Mr Conn advises other firms to be 'careful' when considering mergers.

'There are other things which are just as important as finance, such as staff and their aspirations.'However, the experience has not deterred either firm from further mergers.

Donn & Co is still 'actively' seeking another niche firm.

Mr Donn says the firm still plans to move into its new premises.

Mr Conn says: TI don't think I have been put off the idea of merging.'RADCLIFFES AND CROSSMAN BLOCKRadcliffes was a 24-partner firm, well known in Westminster, with premises close to the Houses of Parliament.

Crossman Block, a young firm of commercial lawyers, had de-merged from Withers at the end of 1990.By 1994 it had become an open secret that Radcliffes was looking to expand to strengthen the company and commercial side of the practice.At the same time, their accountants, Touche Ross, had identified the Aldwych-based, 13-partner firm of Crossman Block as a perfect match.

However, initial contact was not successful.

The accountants experienced trouble convincing the commercial firm that Westminster was a suitable base from which to realise its own City ambitions.

But finally, after some heavy lobbying, these objections were overcome.By January 1995 merger teams had been set up, but it took until June for non-binding heads of agreement to be signed.

The original exploratory talks were conducted between Radcliffe's managing partner, Robert Vallings, and Crossman's chief executive director, Peter Dale, a chartered accountant.This was followed by several informal meetings with all the partners.

Mr Vallings says: 'These were particularly important to see if there were any clashes of personality.' The next step was for the heads of department to swap lists of clients so that the commercial nuts and bolts of the merger could be properly assessed.

The negotiations were not characterised by the sort of power struggles which determine so many City deals.

Mr Dale, who is not a solicitor, had appreciated from the beginning that there was not going to be any ongoing role for him in the merged firm.

He made this plain very early on, says Mr Vallings, and this helped to clear the air and smooth things along.By March 1995, after a series of more detailed discussions, both firms were committed to the merger.

Each had had a chance to see how the other had met its financial targets for the year.

Terms were agreed in June, and the merger agreement was signed in July.It was not un til after the senior partners had returned from their August holidays that things started to take off.

One of the first clients to benefit from the merger was an old Radcliffes client, the computer management group CMG, which was about to go public.

'We were now able to throw a much improved team at the job,' says Mr Vallings.

Another unexpected bonus was sub-letting the former Crossman premises in Aldwych.There were some pre-merger casualties on both sides and the odd post-merger personality clash.

But ultimately it worked very well.

'I wouldn't say it was all a bed of roses, but then we didn't expect it to be,' says Mr Vallings.

'I still say Radcliffes out of habit but, I must say, I am now finding it easier to say RCB.'NABARRO NATHANSON AND TURNER KENNETH BROWNThe long-established London firm of Turner Kenneth Brown spent the early 1990s damaged by the recession, with falling profit margins and rising debts.

Any hope of a rescue package seemed inextricably linked to a high profile merger.

But, after a collapsed merger deal with Alsop Wilkinson in 1994, the business had been skillfully turned around and the TKB senior partners no longer saw their salvation tied to a merger deal.Former TKB marketing partner Rhidian Jones says: 'We were in a very good state and were not looking to negotiate with another law firm.'The work profile of top ten firm Nabarro Nathanson was mainly large plcs and the public sector with a smattering of niche areas.

Many clients operated on a nation-wide basis and Nabarros understood the need to do likewise.

Significantly for Nabarros, TKB had a large and successful Reading office.By 1994 Nabarros felt assured that the financial difficulties facing TKB had been exaggerated.

Shortly after TKB's failed merger with Alsops, Nabarros initiated merger talks.

After initial rebuffs on the grounds of Nabarro's size, persistence finally paid off and, by the end of 1994, the two firms were talking.Nabarros made an oblique approach by contacting TKB's accountants.

This paved the way for TKB's managing partner, Jim Edmondson, to meet Nabarro's practice development partner, Peter Sigler, for preliminary discussions.'We didn't want another false dawn and the negotiations were extremely delicate,' says Mr Jones.But once a proper analysis had been carried out, it became clear just how well suited the two firms were.

Turner Kenneth Brown had a strong practice in corporate, venture capital and intellectual property, with a Reading office servicing high-tech industry on the M4 corridor, while Nabarros had a good City reputation and an eye on expanding into the regions.On 1 May 1995, following a series of more purposeful meetings, the merger agreement was sealed.

Three months later the TKB staff moved out of their London offices in Fetter Lane and settled into their new London premises in Stratton Street.Mr Jones says the Turner Kenneth Brown lawyers represented a significant number of people whose views had to be recognised.Although he concedes: 'It would be idle to suppose that a firm a fifth of the size is going to be able to be preserved as a separate organisation.

Nabarros has been open-minded enough to use our systems where they are better and to learn from our experiences.'Nabarros also put money into the merger by investing in a brand new £750,000 computer system for all its offices.

One of the reasons the merger has worked so well, says Mr Jones, is the similarity of the two firms' cultures and the personalities involved.

'One of the Nabarros partners lives 100 yards down my street in west London.

Many of us knew each other on a personal level before the merger,' he says.Mr Jones' advice to a smaller firm looking to merge with a larger one is to 'value yourselves to achieve the optimum benefits from the merger'.

In this way, he says, smaller firms can avoid being 'asset-stripped'.