Crunch time – the real work is just beginning for Norton Rose
Five quick-fire international mergers and three-and-a-half years are all it will have taken Norton Rose to transform its business from struggling UK mid-tier practice to global giant by the time its merger with Fulbright & Jaworski goes live this summer. Any way you look at it, the scale of what the firm has achieved is impressive, as our analysis this week illustrates. Even rivals – usually quick to criticise – readily concede that the mergers Norton Rose has pushed through are hard to knock.
February 14, 2013 at 07:03 PM
3 minute read
Five quick-fire international mergers and three-and-a-half years are all it will have taken Norton Rose to transform its business from struggling UK mid-tier practice to global giant by the time its merger with Fulbright & Jaworski goes live this summer.
Any way you look at it, the scale of what the firm has achieved is impressive, as our analysis this week illustrates. Even rivals – usually quick to criticise – readily concede that the mergers Norton Rose has pushed through are hard to knock.
Yes, there is no financial integration, and yes, it was always going to be easier for a Norton Rose or a Lovells to do deals of this nature than for a magic circle firm. But neither of these points are enough to damn the unions.
In fact, if anything, in addition to the impact the deals have made on the firm itself, one of Norton Rose's greatest achievements has been transforming market opinion on verein deals without financial integration.
But this doesn't mean Norton Rose can rest on its laurels. What comes next will arguably be far more difficult and far more long-winded: integration. A task that, according to one legal consultant, makes up around 75% of the work involved in a merger.
Growth through acquisition is all well and good. But the firm now needs to turn itself into a single, fully functioning entity, with revenues at both a global and regional level growing in their own right. This means getting partners to work together to boost referrals across the whole business – perhaps through the use of single client development programmes.
Only if it manages this will Norton Rose really be able to deal with one of the biggest issues it faces: raising its profits per equity partner (PEP), which at £477,000 in 2011-12 were more than £100,000 less than the average across the UK top 50.
Of course PEP isn't everything, and Norton Rose, with its collegiate culture, should not be aiming to become Linklaters or Slaughter and May. That said, there is a limit to how far behind its most comparable peers it can slide without it affecting either recruitment or retention – a fact the firm is clearly aware of.
Potentially hindering its chances of doing this is the lack of financial integration. Without the shared benefits of any return on cross-selling, the firm will need to come up with a different way to motivate lawyers to work together.
However, if Peter Martyr uses the same drive with which he has steered the firm through all of the recent mergers to pull partners together, there seems little doubt he will succeed. After all, many firms would struggle to pull off even one merger, let alone five in short succession.
Whether or not Martyr succeeds won't be measurable for a good few years. But, in the meantime, the hard work definitely starts now.
- For for the full analysis, see And now for the hard part – after five mergers, can Norton Rose's CEO tackle his biggest challenge yet?
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