As an advert for the merits of verein firms, King & Wood Mallesons is not doing a great job right now. The 'Power of Together' slogan it gave itself on merging and its 'one team, one firm' core value could not look more inaccurate as its European partnership scrambles for a solution to its financial woes.

With the firm looking anything but together right now, the often-shouted argument that verein firms can be just as collaborative as those with a single profit pool is looking as wobbly as KWM Europe's future.

Of course, there are vereins, and then there are vereins. There has always been a marked difference in the external perception of, say, Hogan Lovells compared to KWM, which has long faced questions about the reality of how integrated three distinct partnerships in China, Australia and Europe can truly be.

But with the legacy SJ Berwin business now teetering on the brink, the true weakness of KWM's union has been well and truly exposed, along with a staggering lack of confidence in management on the part of partners.

Last week's shock news of the failed plan to recapitalise the European business made it clear that the European management team was looking for a solution to its own problem. Effectively, Europe was on its own.

The firm's China arm had given it a chance, by backing the recapitalisation plan with financial support of its own, but the offer came too late for a European partnership whose confidence in the firm and its leaders has clearly broken down.

After multiple partner exits and long-term issues paying out partner drawings, just 21 of the remaining 130 partners were willing to commit in full. By any standards, this is a shocking indictment of the partnership's confidence in the business.

And the news that the Chinese arm of the firm is now considering buying all or some of what is left of the European business raises even more questions. It is understood to be China, not China and Australia together, looking at Europe. And if it is really committed to this business, why has it left it so long – until after Dentons' interest became clear – to make a play?

From the perspective of partners in China and Australia, why commit to paying in cash if the people you're supposedly bailing out are unwilling to make any commitment of their own to the business? What would be left of it in 12 months?

But on the other side, for the Europeans, after years of issues with pay and with so many senior partners showing no loyalty to the brand, why take on additional personal financial commitment to the business? The result is a stalemate of huge proportions.

Of course, many of the problems in the European business were issues for SJ Berwin long before KWM got involved. Partners had already been fleeing the firm before the 2013 merger. In theory, the combination with the Sino-Australian firm offered a potential solution – a new strategy, new firm-wide leadership and a chance to regroup as part of something different to what was on offer anywhere else.

Unfortunately, efforts to fix the underlying issues with the legacy UK firm's business were not enough – and the loss of the SJ Berwin brand did not help much either.

The end result is a mess for all concerned. While partners still at the firm are being encouraged to stick together to make any potential rescue merger easier to achieve, the temptation for individuals and teams to put their own interests first must be huge. Particularly given legacy SJ Berwin has hardly been known for its collegiate nature.

And while the verein structure means that, in theory, China and Australia will be financially shielded from all of this, there will inevitably be serious reputational damage.

In practice, if they do not rescue some of what remains of the European business they will find it tough to rebuild, as it is hard to imagine other UK firms will be queuing up as replacements, given what has happened.

As a poster child for Swiss verein mergers, KWM looks set to go down in history for all the wrong reasons.