Therese Pritchard and Lisa Mayhew

Almost exactly two years after talks between Berwin Leighton Paisner (BLP) and US firm Greenberg Traurig ended, the UK firm last week confirmed that its latest attempt to enter the US market had been more successful, with its tie-up with Bryan Cave set to go live this April.

After the very public failure of the Greenberg discussions, last week's partner approval will have come as a huge relief to BLP, which confirmed the negotiations with St Louis-based Bryan Cave in October last year.

When the deal goes live next month, Bryan Cave Leighton Paisner (BCLP) will be among the 40 largest law firms in the world, with combined revenue of about $970m, and roughly 1,600 lawyers working across 32 cities in 11 countries.

Outside the US, the pair have four duplicate offices in London, Paris, Hong Kong and Frankfurt, where Bryan Cave lawyers are ultimately expected to move into BLP's offices.

In contrast to virtually all transatlantic tie-ups to date, the pair are pushing ahead with full financial integration from day one, with a single profit pool and a single, aligned remuneration structure from this time. The decision was made despite the one-off tax hit the integration will incur as a result of the different accounting systems in the US and UK.

Some suggest that BLP is likely to adopt the US firm's calendar year end and cash accounting system, though the firm would not confirm this.

Speaking to Legal Week sister publication The American Lawyer after the merger confirmation, Bryan Cave managing partner Therese Pritchard (pictured) said the shared profit pool was an important element in incentivising shared work among partners.

She explained: "In our mind it provides the incentives to find the best people in the firm to service the clients' needs. We think at the end of the day that is a better way to operate. We are all in it together."

According to one rival law firm leader, the tax hit involved means the firms will not have taken the decision lightly.

He says: "As a one-off hit, you're probably talking £20m-£30m, and that would primarily be the UK partners' liability, so I would think they would be staggering that over a number of years. It's a front-loading of a tax liability, so it would only happen once, but you would think it must have been a requirement of the US arm that this happen."

This merger shows that full financial integration is not impossible, but it is going to be very difficult to achieve

One ex-BLP partner warns that despite the commitment of management, financial integration at partner remuneration level will be difficult, even though average PEP levels at both firms are very similar.

They suggest: "I think slotting people into a single equity structure at partner level is quite a tough thing to do across the Atlantic. This merger shows that full financial integration is not impossible, but it is going to be very difficult to achieve. "

Other former BLP partners say that regardless of any tough negotiations on the tax front in order to get the deal over the line, the firm was taking few chances after the high-profile collapse of talks with Greenberg, as  "it would be too embarrassing if they had fallen out of bed twice".

Another ex-partner comments: "It would have been a disaster had they not gone ahead because of the failure last time."

A fourth adds: "I think there were people at the firm who would push it through no matter what – there are very powerful people at BLP who would have been lobbying hard for it to happen. I would be surprised if most people didn't vote for it. I think BLP people knew they couldn't easily carry on as they were, and it would be difficult not to support it."

While neither firm has confirmed the percentage of partners voting in favour of the merger, it is understood that at BLP the number comfortably surpassed the 75% of partners required to vote yes to the Greenberg deal.

Since the confirmation of merger talks between the two firms, three partners have left BLP for rivals. Corporate crime and investigations head Aaron Stephens left for King & Spalding in February this year, while in November, hotels group head Karen Friebe joined Bird & Bird and real estate partner Anthea Bamford was recruited by Weil Gotshal & Manges.

While some rivals and market commentators question how the deal will fare in the longer term, overall most are positive about the union.

One ex-partner says:  "This merger achieves the objective that Lisa Mayhew (pictured) set out when she started as managing partner, which was to boost the revenue of the firm significantly. Whether it will work or not I don't know."

A law firm consultant concludes: "This doesn't change BLP's position dramatically – it is not a silly merger, but it is not likely to dramatically change the firm's market position Like Norton Rose Fulbright; it should allow them to be a long-term survivor."

In numbers: 

Bryan Cave

  • Revenue – $608m
  • PEP – $865,000
  • Equity partners – 199
  • Non-equity partners – 177
  • Total headcount – 870
  • Offices – 25

BLP 

  • Revenue – $368.5m
  • PEP – $855,000
  • Equity partners – 80
  • Non-equity partners – 117
  • Total headcount – 685
  • Offices – 14