Lovells disbands German integration committee
Decision indicates Lovells/Boesebecks' merger has gone smoothly, unlike City rivals
June 14, 2000 at 08:03 PM
3 minute read
Lovells has disbanded its four-partner merger integration committee just six months after the firm formally tied up with Germany's Boesebeck Droste.
Lovells will now concentrate on business development under the direction of senior management in Germany and London, rather than use a formal committee.
Oliver Felsenstein, Lovells' deputy managing partner in Germany, said the single unanimous vote at Lovells and the 95% of partners who were in favour on the German side had helped the integration process.
He said: "You need an almost unanimous vote for a merger to be a success, even if the governance agreement allows less."
The integration committee, which was made up of two partners from each firm and a group of support staff, will now disband after overseeing 150 separate integration matters, ranging from IT to pay systems.
The committee's dissolution is evidence that the integration of Lovells and Boesebecks is proceeding more smoothly than the integration of City rivals Clifford Chance (CC) and Linklaters & Alliance with their respective German partners.
CC and Puender Volhard Weber & Axster, which merged on 1 January, are still sorting out basic integration issues.
Michael Weller, a Puender managing partner, said: "We are still getting our systems together and we are having lively debates about how we should do this."
He said the firm still had work to do on its IT, knowledge management systems and business development processes and systems.
Weller said the main consideration at the start of the merger had been getting the right salary structure in place.
Rival Linklaters has also spent a lot of time on this issue in its dealings with Linklaters & Alliance German member Oppenhoff & Raedler.
The firms have been working together for almost two years, but Oppenhoffs only voted on the single financial structure of the alliance in April, and in May Oppenhoffs agreed to the final details of the merger. All the Alliance firms are working to complete the integration process by the end of this year.
Compared to the experience of CC and Linklaters, Lovells' German integration appears easy.
Insiders say that one factor in Lovells' favour was the short time between initial merger proposals, the vote on the merger and formal integration Lovells and Boesebecks voted last September and announced that they had become a single firm on 1 January.
Since then, both sides have been busy pushing through changes to add substance to that claim.
In Germany, the accounting system has been changed to the system called Elite, which is used by Lovells. A new firm-wide time-recording system has also been introduced which, despite some initial computer glitches, is now said to be working fully.
The two firms have put in place a single lockstep, using a system to balance out the current differences between City and German earnings.
Felsenstein said these differentials will be phased out within the next five years.
To bring Boesebecks' working practices in line with its merger partner and to help increase profits per partner, the firm has increased its partner-to-associate leverage from 1:1.5 to 1:1.8. It plans to reach 1:2.5 in about a year.
To beef up the Frankfurt office and speed integration, Lovells moved two partners to Germany in April: private equity specialist Judy Bradshaw and banking specialist Andrew Gamble.
But Boesebecks did not escape unscathed from the merger. Four partners expressed their opposition to the plan by joining rival German firm Bruckhaus Westrick Heller Loeber last November.
But the firm is now making headway with new lateral hires, having recently recruited tax partner Joerg Siegels from respected German firm Gleiss Lutz Hootz Hirsch.
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