Unsung by rivals but generating enthusiasm – Hammonds' US merger makes solid start

Unsung it may have been, but a deal to unite Hammonds and Squire Sanders & Dempsey has now arrived, less than three months after news of the talks was announced. With the tie-up set to go live on 1 January 2011, the question is not whether it can live up to expectations – rivals have not been kind – but whether the deal can deliver on its own terms.

On that basis, the logic of the tie-up is understandable, with partners seeing a neatly-fitting global network as a key benefit. Squire Sanders will gain a sizeable London presence and some coverage across Western Europe in Paris, Madrid and Italy while also benefiting from a beefed-up presence in Brussels and a Berlin office to complement its Frankfurt base.

Apart from the obvious benefit of US coverage, Hammonds gains a much stronger footprint in the emerging economies thanks to Squire Sanders' well-regarded network in Central and Eastern Europe and Russia. Asia will remain something of a work in progress but the two firms obviously gain scale to invest.

Hammonds currently generates only around £4m in revenue from the region. The combined practices will have 10 partners in Hong Kong (six hailing from Hammonds) and merged branches in Beijing. Squire Sanders also brings in a nine-partner offering in Tokyo and a 12-lawyer arm in Shanghai.

If the geography works, much of the success or failure of the merger will be about building in the core lines of mid-market corporate and litigation. Hammonds has been serious about litigation for some time under the leadership of disputes head Simon Miller. The practice brought in revenues during 2009-10 of £30.7m.

Both firms are ranked solidly for mid-market corporate finance transactions with clear synergies in areas such as asset-backed lending. Both also boast respected operators including Squire Sanders' European finance group co-chair Andrew Knight and Hammonds' asset-based lending specialist Andrew Watson.

The merger will see Hammonds gain a much larger presence in both areas, with corporate finance set to have approximately 400 lawyers and litigation 350 – prior to the tie-up Hammonds had around 100 lawyers in each group.

Perhaps the most promising areas of crossover in terms of acting for major clients is in energy, where both firms have established profiles. Squire Sanders has acted on a number of deals in the energy sector with Ashland while Hammonds counts National Grid and E.ON among its top clients. Other areas are also complementary, such as employment where both firms have sizeable teams.

Yet in practice terms, you would have to say the mix is adequate rather than compelling. Squire Sanders is stronger in life sciences, healthcare, telecommunications and aerospace and defence – bringing clients like Bayer Corporation and Goodrich to the table – while Hammonds is strong in media and sports, with clients including WPP, Live Nation, Cath Kidston and Leicester City Football Club.

There is also some distance between the emerging market/infra tilt of the US firm and Hammonds' no-nonsense full service coverage; in this regard the previously mooted tie-up between Squire Sanders and Denton Wilde Sapte had more common ground. If that's no deal-breaker, there will be much focus on Hammonds' ability to extract work from the US. There has been some suggestion that Squire Sanders has struggled to achieve that goal in its London office.

Yet the firms will take heart from the apparent level of enthusiasm for the deal on both sides, which goes a long way in any merger. Unsung it may have been, but the deal got done with a commendable lack of fuss.