Ebsworth & Ebsworth and Home Wilkinson Lowry will merge and operate under a joint banner come May, creating what they hope will be the “significant pre-eminent player in the mid tier”. The merger creates a firm with more than 550 staff, including approximately 100 partners.
“The fifth of May is the projected date [for the merger], but there’s scope in the agreement between the two firms for that to happen earlier if circumstances permit,” confirmed Juan Martinez, managing partner at HWL.
Negotiations for the merger came to light late last year, and follow the successful merger with Abbott Tout in April 2007. In a Lawyers Weekly interview in January 2007, Martinez foreshadowed the likelihood of an increasing number of similar mergers in the future.
“I think the interesting part is that it really shows where the legal market’s going — there’s going to be a consolidation of firms moving forward with more specific strategic focuses,” he said.
True to his word, Martinez has vigorously pursued the opportunity to merge with likeminded-firm Ebsworth & Ebsworth. “What looks like a very good opportunity has to be investigated to ensure there aren’t conflicts in relation to clients’ matters, to make sure that the synergies that were readily apparent are in fact [in existence].”
The past three months have been spent conducting due diligence; no small feat according to John Graves, managing partner of Ebsworth & Ebsworth.
“We’re talking about a merger of two firms of over 550 people and there are a lot of things that have to be looked at to ensure that we’re getting the right results for everyone. That’s what takes the time and of course Christmas doesn’t help; we had a lot of people very busy in December and January to achieve a very tight deadline.”
Graves said the merger has been achieved with minimal internal friction. “It is very rare to get two firms of our relative size joining and having so much opportunity to complement and add without much overlap at all,” he said. However, Ebsworths has experienced some emigration of talent in the months leading up to the merger, with several prominent partners leaving the firm.
Sources in the recruitment industry have told Lawyers Weekly they were reticent about placing talent at Ebsworths while the firm was in a state of flux. However, Martinez said his confidence had been bolstered by the Abbott Tout experience.
“I think that we’ve already had that with Abbott Tout. Whilst it in relative terms, it’s recent, everyone at HWL feels integrated, settled, and happy; we’ve had very little leakage in a tough market,” he said.
“To have achieved a merger of that magnitude at the time, it was one of the biggest deals that were done in the legal industry. To have done that in a tight market and to see better than market benchmark retention in a change environment, I think is fantastic. There’s no reason why that shouldn’t happen again.”
The firm will actively seek to recruit talent in the near future, according to Graves. “I think [the merger] presents a whole host of opportunities, particularly for talent that may be wanting a bit of a watershed change perhaps in approach and culture. They might have particular professional lifestyles at the moment, maybe even in the top-tier, and say ‘well, here’s a firm that got a quality and pre-eminent position in the mid-tier, but has a different cultural outlook and a different positioning to where I’ve been’,” Graves said. “This may be an opportunity for shift of professional lifestyle. I think that’s certainly something that should excite the market.”
Both managing partners expect the merger to deliver significant financial returns. “The firms as a combined entity will have significant upside and financial dividends out of this,” said Martinez.
Integration will be the next challenge for the merged entity. In stark contrast to the jettisoning of the Abbott Tout brand name, Martinez confirmed that the merged firms plan to operate under a joint banner that involves both brands.