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Merger talks between private client law firms Speechly Bircham and Withers have been abandoned, the firms announced today (23 May).

A joint statement from the firms said: ‘Following detailed discussions between the management and partnerships of Withers and Speechly Bircham, both sides have now concluded that a merger would not be in the best interests of both firms and have agreed not to pursue this further. The talks have enhanced the respect that both firms have for each other.’

The merger would have created a 600-lawyer practice with a combined £170m and would have elevated it into the top 25 of the Legal Business 100. It is understood that both firms had put the proposed union to their partnerships this week to gauge support, which led to the union being called off.

In a statement, Speechlys managing partner Michael Lingens said: ‘Our discussions with Withers were both interesting and positive but both sides separately concluded that we should pursue independent paths.

‘For Speechly Bircham, that means continuing our strategy of developing our well-established commercial and private wealth practices in an increasingly international context. We have recently opened an office in Zurich as part of our focus on international private wealth, and growth in the funds and tax work of our Luxembourg office has just led us to move to larger offices there.

‘We intend to open a third office in a major European location this autumn, with a significant team hire. The office will be focused on providing corporate and tax services to a commercial client base in line with the profile of our other offices.’

The proposed deal had been received by some as a promising union, though rivals generally saw the deal as more advantageous to the smaller Speechly than Withers. There was some gap in the underlying profitabilty of the pair with Withers enjoys a substantially higher profit per lawyer at £72,000 compared to Speechly’s £46,000. However, Speechly would have given Withers a solid mid-market transactional team to offset its core private client team.

The abandoning of the talks comes despite a sustained run of consolidation in the UK and internationally, with SJ Berwin currently in discussions over a union with Asia Pacific giant King & Wood Mallesons.

sarah.downey@legalease.co.uk

Private client leaders Speechly Bircham and Withers are set to merge, potentially creating a 600-lawyer, £170m practice that will fit easily into the top 25 of the Legal Business 100.

News of the union was revealed by RollonFriday on 22 March. On paper the union would make strategic sense. The two firms have almost identical profit margins (Speechly 20%; Withers 21%), although Withers has a considerably higher profit per lawyer of £72,000 to Speechly’s £46,000.

However, the real benefits of the merger will be the combined strength in serving high-net-worth clients. The two firms are highly ranked across various private client disciplines in The Legal 500 and both have considerable international wealth management practices. Withers is a longstanding transatlantic law firm, while both have expanded in recent years into different but strategically important private client jurisdictions, including Switzerland, Luxembourg and Singapore.

Both firms are also no stranger to tie-ups: Withers merged with US practice Bergman Horowitz & Reynolds in 2002, while Speechly’s acquisition of Campbell Hooper in 2009 was widely credited as being the first of a wave of mid-market consolidation post-Lehman.

A likely deal comes amid a continuing run of consolidation in the middle ranges of the UK profession, with Legal Business revealing this month that Addleshaw Goddard and Nabarro had recently held – and abandoned – merger discussions.

Update Monday 25 March – The firms have released a joint statement.

‘Withers and Speechly Bircham can confirm that they are in preliminary discussions regarding a potential merger. Both firms see exciting opportunities for growth in such a merger.

‘Both Withers and Speechly Bircham have been growing their international offering in response to changes in the global legal market and the increasing importance of private capital in the world economy.

‘There is still a lot more work to be done before any final decision can be reached and so we will not be issuing any further comment at this stage.’

However, one former Withers partner said that the talks are far from preliminary.

mark.mcateer@legalease.co.uk