Ashurst today (26 September) effectively threw down the gauntlet to a number of its newly-merged competitors by announcing it has ‘overwhelmingly’ voted in favour of full financial integration with Blake Dawson, including agreeing on a single profit pool.
The united firm will operate a managed lockstep and will have a single unified management structure operating globally under the Ashurst brand, after Blake Dawson rebranded as Ashurst Australia.
The merger – which creates a firm of more than 3,500 people, including 1,800 lawyers, across 28 offices in 16 countries – will take effect on 1 November 2013. Its combined revenues will exceed £550m (A$930m), placing it just outside the top 10 of the LB100.
Ashurst senior partner Charlie Geffen told Legal Business: ‘Now we have a single profit pool, a single partnership compensation system and a single governance system. We think those things really matter and they are not easy to achieve.’
Remuneration and profit sharing are typically the largest stumbling blocks to any merger and Herbert Smith, which voted on financial integration with Australia’s Freehills in June 2012, has yet to come to an agreement with its partners over remuneration. Norton Rose Fulbright, which has undergone expansion in South Africa, Canada and most recently in the US through its merger with Fulbright & Jaworksi, has adopted the verein model with the intention to move largely towards financial merger but has yet to achieve that goal.
Geffen added: ‘We are believers in the global elite model. There will be a small band of firms in the club and we believe that we’ve got a really good crack at being one of them.’
The vote, which was brought forward by six months to this October, required a 75% majority, a target that is understood to have easily been achieved.
James Collis has already been confirmed as global managing partner of the combined firm, while the elections for the role of chair and vice-chair – to replace the current senior partner position – and for the management board of 14 will take place in stages, with the chairman election expected to take place first.
Collis said: ‘Over the last few years a great deal of work has taken place across practices and functions in terms of integrating the businesses and we have been operating as one firm for some time. Full economic integration will facilitate even greater collaboration and flexibility across teams and practices globally, thereby enhancing client service and opportunities for revenue growth as well as driving greater efficiency.’