While most transatlantic unions between law firms result in Swiss verein structures that separate the profit pools shared out between the two partnerships, BLP’s managing partner Lisa Mayhew (pictured) said a merger between it and Greenberg ‘would be full financial integration’. The talks also include Greenberg Traurig Maher, the US firm’s London arm run by corporate heavyweight Paul Maher.
With merger talks having been ongoing for at least four months, Mayhew has lead the discussions for BLP with Greenberg’s executive chairman Richard Rosenbaum. Should the merger be put to a vote, BLP would require 75% of the partnership to approve the combination.
Mayhew told Legal Business: ‘We’ve set ourselves two main targets. First, we want to be a game-changing law firm. We have a strong history of innovation and we want that to continue and set ourselves apart from the competition in the way we deliver and provide services. Secondly, we’ve set ourselves a target to be the world’s number one real estate and infrastructure firm. BLP is performing well, so we’d only do this merger if it expedited our strategic aims.’
With the US by far the world’s largest legal market, and BLP absent of any presence in the Americas, a tie-up with real estate heavy Greenberg would accelerate that plan.
BLP’s three core sectors, as laid out by Mayhew who undertook a strategic review after taking the top job last spring, are financial services, private wealth and energy and natural resources. The firm’s real estate group, which has driven growth in recent years under the leadership of practice head Chris de Pury, has so far achieved the best penetration among those sectors and is expected to benefit the most from a merger with Greenberg.
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.
Another heavily talked of benefit from the potential merger is the addition of BLP’s well-regarded international disputes team to Greenberg’s team in the States. Despite Greenberg’s disputes practice in the US being its biggest revenue generator, the firm refers all its contentious work outside the US to other firms as it has no overseas disputes presence.
Some of the obstacles to overcome in the merger talks include easing concerns among Greenberg’s US partners that BLP’s London headquarters, home to 600 lawyers, would become the combined firm’s largest office.
The plan for full financial integration is ambitious and creates some issues. A frequent headache in transatlantic law firm merger discussions, Greenberg operates on a cash accounting system favoured by many US law firms, while BLP operates on a more complex accrual basis. The difference is that Greenberg only reports cash when it comes in the door, whereas BLP records cash when it is received but reports in the period the payments relate to.
BLP remains underweight internationally, with around 75% of its lawyers based in the City, whereas Greenberg has 39 offices around the world but has had an uneven impact on the City market since launching in 2009 with the arrival of Maher. Greenberg’s London office has about 50 lawyers.