Wragge & Co at last has the prospect of achieving its long-held dream of securing a substantive City merger, with the Birmingham-bred giant today (18 November) informing its partners of discussions with Lawrence Graham.
The proposed talks could create a £170m legal practice, with over 700 lawyers and a strong City presence.
Wragge & Co is currently the 27th largest UK law firm with revenues in 2012/13 of £120.5m and profits per equity partner (PEP) of £338,000.
Lawrence Graham, meanwhile, has fallen outside of the UK top 50 after a prolonged period in which it has struggled for growth. The 200-lawyer firm saw income of £51.8m in 2012/13, a decline of 23% over the last five years. PEP declined 14% over the year to a current total of £260,000.
Wragges senior partner Quentin Poole told Legal Business that the two firms had known each other for some time and that a union would fit in with the firm’s strategic priority to merge with a major practice in London. He added: ‘Lawrence Graham has a good reputation in areas that fit well with our practice in London.’
Meanwhile Lawrence Graham senior partner Andrew Witts said: ‘We have known the Wragge & Co senior management team for many years and we have always been very impressed by the passion that they have for their business, their people and their clients. We are particularly attracted to the quality of Wragge & Co’s major corporate client base and sector strength.
‘We are exploring the opportunity of combining our businesses, which are extremely complementary in terms of practice areas and international reach, with both firms gaining offices in three new jurisdictions, which is, we believe, a compelling proposition. Above all we are assessing the extent to which our service to clients might be enhanced by our two firms coming together.’
A merger vote has yet to be scheduled.
Wragges has been seeking a London merger for years after conceding that it has had huge trouble cracking the City market despite launching in London.
Lawrence Graham, for its part, has been linked to previous deals including in 2012 having talks with Field Fisher Waterhouse (FFW), which were abandoned in part due to concerns over the profitability of the smaller firm.
Lawrence Graham, which remains best known for its real estate and private client work, has struggled in recent years in part because of expensive office commitments it took on during the boom when it moved into More London. The firm sub-let 20,000 sq ft of space to Bond Dickinson earlier this year but is generally viewed to be struggling to maintain its position in a competitive City middle market.
In contrast, Wragges has recovered after a turbulent period in which its property-heavy practice was ravaged by the credit crunch. The firm last week confirmed that its first half revenues for 2013/14 were up 4% on the same period last year to hit £63m. A successful merger would fall to new management to handle with current managing partner Ian Metcalfe to hand over next April to project head David Fennell.
Wragges has in recent years been attempting to build out its practice internationally, building a network in Paris, Dubai, Guangzhou and Munich. LG has a relatively small foreign network with branches in Singapore, Monaco, Dubai and Moscow.
david.stevenson@legalease.co.uk