At press time, partners at SNR Denton, Salans and Canadian firm Fraser Milner Casgrain (FMC) were poised to vote through a $1bn, three-way merger using a Swiss Verein model.
A source within SNR Denton said that the union was basically a ‘done deal’ with partners from all firms having met on 13 November to review the business plan behind the proposed merger. SNR Denton and Salans have been in talks for a while and have refused to comment on merger speculation. The addition of FMC to the union emerged in November.
Both Salans and FMC have openly been on the market for a merger for a couple of years, with Salans in particular having experienced considerable problems in its global strategy post-Lehman. Salans had a joint venture with Pinsent Masons that ended in 2011, while the EMEA business of SNR Denton has been under pressure since the 2010 merger of the UK’s Denton Wilde Sapte with Sonnenschein Nath & Rosenthal in the US, as revenues failed to match the US side of the business.
However, the proposed merger, which should take effect on 1 January 2013, has left some market commentators underwhelmed. ‘In France Salans is quite good but outside France it’s in the same category as Dentons, it has been in a deteriorating position for quite a number of years,’ said one former SNR Denton partner. The merger would create a firm of 2,500 fee-earners in 79 locations in 52 countries.
‘The problem with a three-way merger is that they’re very rare and complicated by mass integration.’
A legal recruitment consultant
‘The problem with a three-way merger is that they’re very rare and complicated by mass integration,’ said one legal recruitment consultant.
The merged entity will have the seventh largest practice in the world, by number of lawyers, with strengths in energy, insurance, media and entertainment, and real estate law according to the firm. Its projected $1bn turnover would place it roughly level with K&L Gates and Sullivan & Cromwell in the Global 100, among the top 25 firms by revenue in the world.
576-lawyer FMC has a large mining practice and is strong in Calgary. The firm itself was the product of a merger of Fraser Milner and Byers Casgrain in 2000 and is reported to have been in the market for an international merger for some time.
‘If the SNR Denton/Salans deal was tying two rocks together in the expectation that then they might float, this is just adding a third rock to improve flotation, with no empirical evidence that the initial strategy was ever going to be successful,’ said the former partner.
However, the benefits of the merger are clear to other market commentators. ‘The merger will give Salans more critical mass in London, and SNR more presence in key emerging markets, which would give rise to excellent opportunities in their core sectors such as energy,’ said Jason Mann, director of partner search and merger business, Mouland Mann.
In a statement announcing the proposed tie-up in November, it was made very clear that the new firm would be ‘truly polycentric’ with ‘no headquarters, no dominant national culture’. However, it is clear that SNR Denton, as the largest firm in the tripartite merger both in terms of revenues and geographical coverage, is the dominant force. The proposed 14-strong global board and leadership team reflects this – SNR Denton partners account for eight of the places. SNR Denton’s global chief executive Elliott Portnoy and Joe Andrew, the firm’s global chair, will assume the same roles in the new firm.
Although the new firm will unofficially be called Dentons, the formal name of the firm will be ‘Dentons – Salans FMC SNR Denton’. The statement said the firm would ‘employ an innovative name migration strategy to capture the inherent brand equity of the Salans, FMC and SNR Denton names in their current geographies’ – which hopefully means the firm will simply use ‘Dentons’ as soon as possible.