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Comment: BLP’s US merger bid – a certain loss of confidence

If nothing else, it is safe to say Berwin Leighton Paisner (BLP)’s not-very-convincing claim that management was not dead set on a US merger was stretching it. Because recent news that the firm is debating a union with Bryan Cave screams: ‘We really want a US merger!’

The talks come after last year having gone through a bruising but short courtship with the far larger Greenberg Traurig, the thrusting Miami shop which had a culture clash with BLP that could not have been more obvious if it had been heralded by fireworks.

Entering talks with the St Louis-bred Bryan Cave scales down BLP’s ambitions on the basis of getting a deal over the line, with a union looking more like a merger-of-roughly-equals than an outright takeover. The US firm is considerably larger, but BLP is certainly the more prominent brand in its home market.

Plenty would question whether BLP needs a union with a US player that would reinforce a partnership culture that is already too laid-back.

It is not a marriage to quicken the pulse, but then a maturing industry is entering the period of pragmatic transatlantic unions that leave partners on both sides of the pond scrambling to work out who they are hooking up with (Eversheds Sutherland, Gowling WLG and Womble Carlyle/Bond Dickinson). Dull mergers can be good – the tie-up of Berwin Leighton and Paisner was dull until it worked. Heralded deals often stoke the fires of partner ego and then underwhelm.

What BLP would get is greatly-bolstered resources to push forward its international agenda. The City firm has made reasonable progress in Germany in recent years and some inroads in Hong Kong, but Paris is a glaring weakness and the firm has been slow to move its real estate business into Asia.

The firms have some common ground in having sizeable property and disputes practices. The most obvious fit is in culture between the pair, which has made considerable play of experimenting with innovation and alternative business models, and both have collegiate partnerships.

Is that enough? The practice fit is hardly glove-like – as a full-service regional operator Bryan Cave has more emphasis on corporate. In recent years, BLP has tilted increasingly away from a transactional core to focus on areas like tax, private client and specialist finance lines it can cross-sell with its property team.

Mainstream corporate is just 17% of its income and property has been put back at the core of its business. Plenty would question whether BLP needs a union with a US player that would reinforce a partnership culture that is already too laid-back. Is Bryan Cave an over-reaction to the jarring culture shock that being taken over by Greenberg would have entailed?

Neither is the timing that obvious, coming close to a period in which BLP has been an indifferent performer, rather than giving it a chance to regain the sparkling form it showed during the 2000s when it did more than any firm to reinvigorate the concept of the City mid tier. Unlike then, BLP is now forced to go toe-to-toe with a string of mid-pack London rivals with broadly similar practices that have been out-gunning it. This deal certainly represents a loss of confidence in what BLP can achieve in its own right. Perhaps that is laudable realism, but it is hard to escape the feeling that BLP is selling itself short.

For more on Berwin Leighton Paisner see Solid foundations but a struggle to build – Can BLP regain the confidence of its 2000s heyday?