Berwin Leighton Paisner (BLP) is hunting for an ambitious union with a major US practice, with the City real estate leader currently in discussions with Greenberg Traurig. According to three separate sources, the talks between BLP and Greenberg have been taking place over the past three months as the London firm looks to secure a US merger.
Though BLP managing partner Lisa Mayhew strenuously denied the discussions with Greenberg to Legal Business on Monday (1 February), the UK firm subsequently put out a statement today (3 February) confirming that ‘preliminary discussions are taking place between it and Greenberg Traurig’.
The statement added that BLP’s ‘senior leadership is working to assess the merits of this opportunity over the coming months’.
Greenberg chairman Richard Rosenbaum said in a statement: ‘When opportunities to execute our strategies are presented, we will act on these because we owe it to our clients and our lawyers to explore them.’
BLP has been searching for a suitable tie-up since last spring – when Mayhew replaced veteran leader Neville Eisenberg as managing partner – as part of a substantial strategic shake-up. The 200-partner UK law firm has long wanted to expand its transactional and international practices, with its property and disputes practices having been more dominant forces in recent years.
The merger issue was a key point during the managing partner election in early 2015, which Mayhew won against head of corporate David Collins. Collins – who in December 2015 joined Dentons – had been explicit in favouring substantial mergers.
With a lack of merger opportunities in the UK, having rejected an approach from London’s Olswang at the end of 2015, a handful of US firms have emerged as leading contenders from what one partner says started out as a ‘long list’.
Greenberg emerged as a potential suitor after initial contact more than a year ago. One BLP partner told Legal Business that Greenberg was viewed as the most likely candidate but said that the UK firm was increasingly focused on the case for a tie-up in the US: ‘There have been coffees going on with a number of firms. It’s not fair to say advanced [with Greenberg] but they are serious talks. If you were to ask me if BLP is going to merge, I would say: “Yes – we’ve got to”. We discussed that last summer. The decision was to stay niche and boutique or do something about the international practice. There are three categories of firms we are looking at from the US.’
Other potential partners cited include Morrison & Foerster and Greenberg’s Florida peer Holland & Knight. One former partner told Legal Business that BLP’s referral relationship with Holland & Knight had expanded considerably in recent years.
According to one account, Washington DC’s Covington & Burling had informally expressed an interest in BLP. However, a spokesperson from Covington & Burling denied any approach was made.
BLP had previously established a formal alliance with New York firm Kramer Levin Naftalis & Frankel, which broke down in 2007, in part because the US firm had no interest in further integration.
BLP was one of the most upwardly-mobile UK law firms during the 2000s but hit a torrid 2012/13 after a period of over-expansion, with revenues falling by 5% while profits per equity partner (PEP) plunged 35% to £430,000. Financial performance showed some recovery over the last two years, with revenue rising 5% in 2014/15 to £259m, following strong growth of its real estate and disputes practices. Real estate is core to both firms, with the practice contributing around 30% of BLP’s revenue, and Greenberg employing more than 300 property lawyers globally.
BLP is, however, still underweight internationally with around 75% of its lawyers based in the City. It has no presence in the Americas, with its strongest international offices in Israel and Russia.
Greenberg has 39 offices around the world but has had an uneven impact on the City market since launching in 2009 with the hire of corporate heavyweight Paul Maher from Mayer Brown. The London office, which operates as Greenberg Traurig Maher, about 50 lawyers. Greenberg Traurig is the world’s 20th largest firm by revenues.
There is, however, a gap in profitability between the two firms. PEP at Greenberg stood at $1.424m in 2014, against £661,000 ($1.090m) for the UK firm’s 2014-15 year. Greenberg is a considerably larger firm with over 1,800 lawyers compared to BLP’s 700.
Morrison & Foerster, meanwhile, has seen its presence in the City decline after West Coast rival Cooley last year raided it for five partners to launch in London. The firm now has 14 partners in the City.
For more analysis on BLP’s Lisa Mayhew see: ‘A new generation and challenges ahead as BLP leader takes helm.’