Terms of bid to forge £300m legal giant emerge ahead of key vote

Barlow Lyde & Gilbert is set to ask nearly 10% of its partnership to leave if its merger with Clyde & Co is approved by both firms' partnerships this week.

Around 10 of Barlows' 97 partners are expected to be asked to go as part of the terms of the tie-up. Of the remainder, at least 32 are expected to join the equity at the combined firm, compared with a current equity partner count of 64 at Barlows.

Those partners that do join the merged firm will be tied into an 18-month lock-in, during which they will have to pay a financial penalty should they decide to leave.

Details of the merger terms have emerged as Clydes' partners vote on the deal today (28 July), with Barlows partners set to vote tomorrow.

For the deal to go ahead, Clydes needs the approval of at least 80% of its partnership, with Barlows requiring approval from at least 75%. The tie-up would then be expected to go live in November this year.

Management positions have not yet been confirmed, although it is understood that Clydes senior partner Michael Payton (pictured) is likely to continue in the role at the combined firm. Possible names under consideration for the merged entity include Clyde 
BLG & Co.

Clydes' partnership indicated broad support for a tie-up at the firm's partner conference last month and, despite the robust terms, it is thought likely that Barlows' partners will also vote in favour of a deal.

One partner from a rival insurance firm said: "If my impression is right, what we're reaching is the end of the beginning. Once the votes have taken place they will be getting to the nitty gritty, with Barlows partners locked in."

If the deal, which has been under discussion since February this year, goes through, it will mark the largest-ever merger between two UK law firms, creating an insurance specialist firm with combined revenues of more than £300m.

Clydes has 183 partners, with 104 equity partners averaging profits of £605,000 in 2010-11. In contrast, Barlows' profits per equity partner increased by 30% last year, to around £390,000.