Does Norton Rose's Oz deal deserve the stinging verdict?

Those still nursing delusions that senior City lawyers are a charitable bunch would have been swiftly disabused of that notion had they this week discussed the merits of Norton Rose's surprise tie-up with Australia's Deacons. The response can be summed up as a double helping of negative with a large side-order of snide. I'm not sure that's fair. The move, which is the largest international union for years, is definitely a little off the beaten track – but then the road less travelled often turns out to be the most rewarding.

True, Deacons, despite its size, is only a mid-tier player in the Australian market – critics would also write it off as domestically-focused. But that could prove a positive in the long-run as Deacons will have a strong motive to make its international union deliver rather than getting hung up on national status. Norton Rose, for its part, has a big incentive to plug its international practice into Deacons given that it has now staked its international strategy so publicly on Asia.

Likewise, the distinctive selling point of being the only international law firm to have secured a major local merger, together with the sheer weight of resources the combined group will have in Asia, should haul in some business. Neither will access to well-trained and internationally-mobile Australian lawyers hurt. Also promising is the practice mix, with Norton Rose's heavy slant towards energy, projects and financial services looking a decent match for Deacons.

In the final analysis, it seems hard to see a major downside for Norton Rose beyond, potentially, having to go its own way a few years down the line if it doesn't work out. And that's not a massive problem, unless the firm suddenly decides it must crack the domestic Oz market, so it's very unlikely there will be a repeat of the Johnson Stokes & Master debacle. Conversely, if the deal delivers, the upside is considerable.

A major element in delivering it will be whether Deacons is able to make good on the claims regarding its expanding Asian practice. The other major issue will be how integration, will be handled (and it does sound like there is some fudging on integrating partner compensation). Differing profitability suggests Deacons would need to get a fair bit leaner before the two partnerships could easily gel. But given Norton Rose's bruising experience with the Gaedertz takeover in Germany, they should have picked up a few tricks on how to handle that.

On a wider note, it's interesting that recent months have seen upwardly-mobile City firms, rather than the magic circle, secure major international deals, with Ashurst and Berwin Leighton Paisner launching respectively in New York and Moscow. It's good to see such firms showing nerve and ambition, rather than copying from large firms' playbook.