Clydes' ambitions in construction receive a boost with hire of well-regarded team

It took some time to get there, and it didn't pan out as initially expected, but the conclusion to the merger talks between Clyde & Co and Shadbolt appears to be a good result for the London-based insurance firm.

Talks between the two started over a year ago after the construction boutique completed a strategic review of its business. The retirement of high-profile name partner Dick Shadbolt in 2008 left the firm without a clear-cut strategy and struggling to maintain its financial performance, according to a variety of partners familiar with the firm. With 18 partners spread across its offices in London, Guildford, Reigate and Paris, Shadbolt was struggling to adopt its focus of handling corporate and projects work for UK subcontractors to an increasingly international construction market.

In particular, construction clients were growing frustrated that the firm had such a limited international reach, especially in the Middle East. Enter Clydes, with an international network of 21 offices in Europe, Asia, the Middle East and the Americas, and a litigation-heavy practice that has bucked the market to see turnover climb by 17%, to £185m, in 2008-09.

But the initial discussions regarding a full-blown merger between the two firms came to a head when differences of opinions saw Shadbolt's eight-partner disputes department dig in its heels and refuse to join Clydes. Likewise, some of Shadbolt's partners were wary of joining a large City firm, concerned that the charge-out rates at a firm of Clydes' size would not be compatible with their practice. In the end, less than half of the firm have signed on to Clydes, while the remainder have gone on to pursue their own ventures.

Highly-ranked construction disputes partners Peter Sheridan and Jonathan Gold will launch their own practice, Sheridan Gold, while managing partner Helen Boddy, employment partner Kate Matthews and construction partner Tom Pemberton have joined Guildford-based Stevens & Bolton, a firm that has punched above its weight in recent years.

So what does this mean for Clydes? By consensus, the deal turning into a large team move rather than a merger will make the Shadbolt contingent far easier to integrate, removing the issue of handling the firm's less profitable teams. One Clydes partner comments: "We were [initially] looking at taking the whole thing. The partner vote happened in mid-December and at that point it was an easy sell. The other parts now have to find a home."

The clear selling point for partners at Clydes was that Shadbolt London head Liz Jenkins and her team would be bringing a raft of new client relationships and a projects practice to help Clydes bridge the gap in its existing construction practice and connect the links between London and the Middle East. The firm is also taking on Shadbolt's Tanzanian alliance, allowing better access to infrastructure work coming out of the North African region.

Clydes, already one of the most expansive firms in the top 50, looks to have acquired a well-regarded and complementary team in a manageable package. Not a bad start to the year.

Clyde & Co on the Legal Week Wiki