Dibbs Abbott Stillman was formed three years ago as the result of a federation agreement between Dibbs Barker Gosling — which had offices in Sydney, Brisbane, Perth and Canberra — and Melbourne firm Abbott Stillman & Wilson.

Last week, however, the Sydney office announced it would be withdrawing from the federation, which due to a clause in the agreement, will have the effect of dissolving the agreement entirely.

Sydney managing partner Alan McArthur explained that the Sydney and Melbourne offices each performed an analysis of their future strategic aspirations and investment priorities, and in McArthur’s view, they “didn’t sufficiently overlap” to justify Sydney continuing with the agreement.

The Sydney office, he said, is looking to invest heavily in its commercial, corporate and M&A practices, while the Melbourne office is more focused on the areas of insurance, property and banking.

“We just don’t think it’s appropriate to try and align that mix trading under the one name because, really, what we’re going to do is confuse the branding in the market place,” he said.

According to Melbourne managing partner Duncan Hart, who joined the firm just four months ago, the news came very much as a surprise.

“To be frank, it was completely unexpected,” Hart said. “I came on board here on July 1 … and it was very much my brief to pursue, to grow and to continue to develop the relationships [between the offices]. In the three months I have been here there has been a considerable amount of travel achieving just that aim, so the turnabout in Sydney was, yes, completely unexpected.”

On a practical level, Hart explained, neither office will be able to continue to use the “Dibbs Abbott Stillman” name, and there will be some work involved in splitting up services that are shared across the offices.

“There is a measure of dislocation involved … the major issues are around common facilities [such as] IT, and suppliers ranging from stationery through to recruitment services. There [has been] a fair bit of co-operation and consolidation over the years on those sort of functions,” he said.

However, despite the split, Hart said that the offices will continue to work together and that there are no hard feelings between the two.

“Obviously we respect Sydney’s right to make their own choices and we are each independent offices, so people are entitled to do so,” Hart said. “I can assure you, there’s no bad blood, no animosity and it really is business as usual. I don’t see any practical day-to-day difference. It’s purely a question of whether the parties collectively saw full financial integration as the end position. Clearly Sydney did not.”

McArthur concurred that the offices would continue to work together and that their withdrawal won’t affect business from their clients’ point of view.

“The end result is that we’ve got relationships and clients in common that we provide services to nationally, particularly in property and banking, so [we’ll] make sure we continue to service those clients and do that well,” he said.