It would create a south-east giant with combined revenues approaching £100m but any potential tie-up between Blake Lapthorn, Boyes Turner and Morgan Cole could require some considerable rationalisation.
The firms are currently in the very early stages in merger talks, potentially creating a firm with offices across the Midlands, south of England and Wales, employing over 450 lawyers.
A statement from Blake Lapthorn managing partner Walter Cha said: ‘A merger is one of the many options we have been exploring and Morgan Cole and Boyes Turner – both excellent firms – have been among those we have talked to. Discussions have not progressed beyond first stages at this juncture and it is too early to say whether talks will continue with either of the firms or indeed others.’
The union would make sense at a fundamental level as both Blake Lapthorn and Morgan Cole have found the post-Lehman years particularly difficult and while Boyes Turner has developed a strong local practice in Reading, the union would allow it to be part of a larger national offering.
Blake Lapthorn chairman Stephen Murfitt said: ‘In common with what other firms are doing, we are looking to build a competitive advantage. The market will consolidate. A number of firms are looking at mergers at means of improving their competitive advantage and we are no different. As a consequence, we are bound to talk to other firms in order to see whether we can achieve a cultural mix. If this merger were to happen, it will consolidate our position in Reading and Thames Valley, and we would also have a presence in Wales.’
But the Thames Valley heartland of the new firm would be saturated, with Morgan Cole and Blake Lapthorn both having offices in Oxford, while Boyes Turner’s Reading base is also home to another local office for Morgan Cole.
Although the smallest firm of the three and the only one not to feature in the Legal Business 100, Boyes Turner has been the strongest performer financially this year, with revenues up 4% to £14.7m in 2012/13. In some senses it would be taking the biggest gamble in joining up with two larger local rivals, both of which have had their financial problems in recently.
While turnover is up 5% on 2008, Morgan Cole saw its turnover tumble 8% this year to £33.7m, while profit per lawyer fell 38% to £26,000, with managing partner Elizabeth Carr telling Legal Business this summer that the fall in revenues were expected because of the costs involved in refocusing the firm over the course of the previous year.
Meanwhile Blake Lapthorn – no stranger to mergers after acquiring Linnells in Oxford in 2003 and Tarlo Lyons in the City in 2006, posted flat revenues this year of £45.6m but overall its turnover is down 10% on the figure it posted in 2008.
Nonetheless, with the south and Welsh regional legal markets squeezed hard by the recurring problem of very similar firms offering similar services with no perceptible variation in quality, any combination of practice area strength and consolidation of costs would be particularly welcome. Morgan Cole and Blake Lapthorn are also under pressure from strategic moves made by national rivals this year, particularly the creation of Bond Dickinson and Mills & Reeve’s and TLT’s moves into Manchester.