Legal Business Blogs

Updated merger watch – CMS completes successful tie-up with Dundas & Wilson

CMS Cameron McKenna and beleaguered Scottish firm Dundas & Wilson have merged, the firms announced this evening (12 December), creating a firm of 830 partners and 5,600 employees operating in 57 offices in 31 countries across the world with revenues of around €900m.

The tie-up – led for CMS by managing partner Duncan Weston, senior partner elect Penelope Warne and energy partner Stephen Millar, and for Dundas by chairman Lawrence Ward and managing partners Caryn Penley and Allan Wernham – will give the CMS group additional strength in the UK, particularly in Scotland, where for many years Dundas was considered to have the premier corporate practice.

In a prepared statement this evening the firms, which sought the view of a number of joint clients before deciding to progress to a vote, pointed to their ‘leading and complementary energy and financial institutions practices’, adding ‘together the firm will have an even stronger offering in the two sectors across London, Edinburgh and Glasgow.

Millar said: ‘There are strong and compelling client synergies. Clients want law firms that can combine depth, breadth, quality and value simultaneously. CMS and Dundas & Wilson together does just that. We have been very pleased by the response from clients.’

Scotland is a key market for CMS, which established an energy-focussed office in Aberdeen 20 years ago and an Edinburgh office 15 years ago. The top 10 LB100 firm represents something of a rescue package for Dundas, which has been one of the worst performers in the LB100 in recent years. The firm revealed a successive double-digit drop in turnover for 2012/13, with revenue at the firm down by 11% to £48.7m from £54.5m, while profit was down 21% to £12.8m from £16.2m the previous year.

Profits per equity partner have also fallen significantly, down to £164,000 from £210,000 – a fall of 22%.

These results followed one of the poorest performances in the LB100 in 2012, with turnover dropping 12% from £62m at the end of 2011/12 and falling 27% from 2008 to the end of the 2012 financial year. Taking into account the most recent results, Dundas has seen a 35% drop in the last five years, down from its 2008 high when turnover was £74.8m.

This summer Dundas cancelled its vacation scheme for 24 students, due to spend two weeks at the firm’s troubled London office, which the firm blamed on its ‘strategic business objectives’, while eight out of thirteen trainees due to start their London training contract this September have been deferred until 2014.

It has also been dogged by partner departures, particularly from its troubled London office, including private equity duo Simon Sale and Nadim Meer, who left for Mishcon de Reya in April.

Dundas’ recent run of poor form reflects the increasingly tough Scottish market, where only a few independents appear to be thriving. This pressure was a contributory factor in the decision by Dundas’ arch rival McGrigors opting to tie-up with Pinsent Masons a year ago.

However, today the prepared joint statement said: ‘[Dundas] has Scotland’s greatest number of band 1 rankings in the Legal 500 and has featured consistently in the Financial Times’ Innovative Lawyers awards.’

Weston added: ‘Dundas & Wilson is the most prestigious law firm in Scotland and we are delighted that they are joining CMS. with Dundas & Wilson, we believe we can offer many of our clients, particularly in the energy and financial institution sectors, a stronger and better service.’

For more commentary on the Scottish legal market see Setting the heather on fire