'It reflects a greater degree of realism' - partners weigh in on proposed BLP-Bryan Cave merger
Partners size up BLP's latest US merger proposal following last year's Greenberg talks
October 17, 2017 at 06:07 AM
6 minute read
It is fair to say that Berwin Leighton Paisner (BLP) is being a little more realistic with its stateside merger ambitions this time round.
A year and a half after its last US merger attempt failed, when talks with Greenberg Traurig were called off, the UK firm has confirmed that it is in discussions with Missouri-based Bryan Cave.
If the talks are successful, the pair will combine to create a transatlantic player with about 1,500 lawyers, combined revenues of just shy of $1bn, and 32 offices in 12 countries around the globe.
The potential union represents an eye-catching deal that would put the combined firm into the global top 40 by revenue, based on their most recent results.
However, Bryan Cave is undeniably a much more modest proposition than Greenberg. The St Louis-based firm is less than half the size of BLP's former merger target, with revenues of $608m and about 900 lawyers, compared to Greenberg's equivalents of $1.37bn and 1,900 – figures that dwarf even a merged Bryan Cave-BLP.
This difference in scale is not lost on former BLP partners.
"It's a surprise – not that they are in merger discussions, but that the discussions are with Bryan Cave, which is a fairly low-profile firm," says one ex-partner. "I think it reflects a greater degree of realism on BLP's part."
Another adds: "It is quite bold to announce merger talks so soon after Greenberg. They need to do something, but if this doesn't work it will be difficult for them. I thought they would merge with a larger, more well-known American firm."
However, in contrast to the Greenberg discussions, which ended little more than a month after they were confirmed, many are more positive about the prospects for the Bryan Cave talks.
Yesterday's joint announcement from BLP managing partner Lisa Mayhew and Bryan Cave chair Therese Pritchard suggests talks are relatively advanced, with a partner vote expected to take place before the end of the year, while the domain name www.bryancaveblp.com was anonymously registered on 12 October.
Rumours of BLP's ongoing desire for a merger of some kind have continued to circle the firm since its talks with Greenberg ended, with the firm denying suggestions that it had held talks with Norton Rose Fulbright only earlier this summer. Meanwhile, Bryan Cave has been on its own quest for growth, coming close to acquiring Dickstein Shapiro in late 2015, before a deal collapsed shortly after Christmas.
In each other, the pair have found a good degree of practice crossover – both have a focus on real estate, litigation and corporate, though perhaps not in the same order of priority.
Bryan Cave has about 150 lawyers focusing on real estate work, compared to BLP's 300. The US firm has a greater focus on transactional work, with key clients ranging from US agricultural biotechnology group Monsanto, drinks giant Anheuser-Busch InBev, US batteries manufacturer Energizer Holdings, Big Four accountant PwC and US manufacturing company Emerson Electric.
It also has a speciality in retail, with clients in this space including US department store Neiman Marcus, New York headware company New Era, US fashion chain Urban Outfitters and French cosmetics group Sephora.
Meanwhile, BLP remains best known for its real estate and litigation practices, having reorganised its business around these areas in 2015. Its key clients include Tesco, the Crown Estate, National Grid and Canary Wharf Group, while the firm's litigation clients include Royal Bank of Scotland, Morgan Stanley and HSBC.
Former partners suggest the one positive of the proposed deal is that it would be relatively conflict-free.
As one comments: "Certainly from my time there, a combination with a US commercial-oriented firm would be unlikely to throw up many conflicts. Most work coming to BLP from the US was quite fragmented and came from a variety of different US law firms. I don't think the US referrals were that great anyway – that wouldn't be too much of a loss."
Another factor working in favour of Bryan Cave over Greenberg is a greater parity in profitability. A PEP mismatch was a factor behind the breakdown in discussions between BLP and Greenberg, but BLP and Bryan Cave are much more closely aligned.
The UK firm posted PEP of £630,000 for 2016-17, broadly in line with Bryan Cave's 2016 figure of $865,000 (£650,000).
Both firms are keen to tout their commitment to innovation, and Bryan Cave does have a reputation in this area, after recently launching a technology incubator and establishing a programme that trains associates to think of ways on how to use technology to change the traditional business model for providing legal services.
With both firms stating that they will not say anything more about the discussions until after the vote has taken place, it is not yet fully clear what structure the potential union would adopt, although in yesterday's announcement, Pritchard said that the combined firm "would be one of only a handful of global firms operating in a one-firm structure".
As one ex-partner comments: "I think a deal with Bryan Cave would do a couple of things: it gives BLP the US platform, and keeps the focus on litigation and real estate, which they've gone out with saying is their firmwide strategy.
"If they want to achieve their strategy of world domination in real estate, they are going to have to team up – they can't do it incrementally."
BLP and Bryan Cave: in numbers
BLP Total lawyers: 685 Total partners: 196 (80 equity, 117 non-equity) Office locations: London, Abu Dhabi, Beijing, Berlin, Brussels, Dubai, Frankfurt, Hong Kong, Moscow, Paris, Singapore and Tel Aviv Management: Lisa Mayhew (managing partner), Neville Eisenberg (senior partner) PEP: £630,000 Revenue: £272m
Bryan Cave Total lawyers - 910 Total partners – 393 (190 equity, 203 non-equity) Office locations: US (Atlanta, Georgia; Boulder, Colorado Springs and Denver, Colorado; Charlotte, North Carolina; Chicago and Southern Illinois, Illinois; Dallas, Texas; Los Angeles, San Francisco and Irvine, California; Jefferson City, St Louis and Kansas City, Missouri; Miami, Florida; New York, New York; Overland Park, Kansas; Phoenix, Arizona; Washington DC), Frankfurt, Hamburg, Hong Kong, London, Milan (affiliated firm), Paris and Shanghai Management: Therese Pritchard (chair) PEP: $865,000 (£650,000) Revenue: $608m
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