‘Consolidation is an inevitable response in a market such as ours. There is only so much work, and we are all under pressure to be more efficient.’
Mark Rigotti, HSF
Following the proposed combination of CMS Cameron McKenna, Olswang and Nabarro, we asked law firm leaders their views on consolidation in the City
Global ambition
‘The demands our clients place on us to be ever more global, to handle matters that cross multiple borders, and to provide a comprehensive and quality-consistent service across a broader spectrum of expertise and geographies, means these ambitious mergers and combinations in the legal industry are inevitable and will likely continue apace. The trick to whether they will stick, though, is in the integration; it’s easy to do a merger, but it’s hard to really become merged – truly one partnership, one offering.’
Tamara Box, managing partner for Europe and the Middle East, Reed Smith
Positive growth
‘It is really quite exciting – sort of a big bang. Although it might appear defensive, it does create an interesting dynamic: the real estate piece from Nabarro, CMS’s central European offices, its oil and gas offering, its quality corporate practice in the UK, and Olswang with its entrepreneurial and forward-looking culture but which has been hit with some left-field issues that have resulted in the firm having a rough time over the last couple of years.’
Chris Lowe, co-managing partner, Watson Farley & Williams
Competitive advantage
‘In a flat market for many law firms in the UK, you can see the “hourglass effect” – the erosion of market share from the bottom and the top caused by competition from the top global law firms, in-house legal teams, the disaggregation of legal work to lower-cost and/or specialist firms, and competition from alternative service providers, including, in time, the major accounting firms. Where is this leading? Merger activity is likely to continue with a steady drip of big combinations intended to drive inorganic growth into new geographic regions and/or major legal markets, such as London and the US, and enable such new combinations to enjoy economies of scale.’
Oliver Brettle, executive partner for London, White & Case
Aim high
‘Despite the uncertainty caused by Brexit, I think that, yes, more market consolidation will follow, though firms need to be clear on what their priorities are and ensure they’re differentiating themselves from firms that are poorly led or that lack a clear strategy.’
Michael Chissick, managing partner, Fieldfisher
Bigger is better
‘Consolidation is an inevitable response in a market such as ours. There is only so much work, and we are all under pressure to be more efficient to meet clients’ pricing expectations and deliver a competitive return to our partners. Getting bigger is one way to achieve these goals.
In terms of the [CMS/Nabarro/Olswang] merger and the talk of a potential US firm tying into that, it is too soon to draw any conclusions. In addition to the strategic fit, getting the cultural piece right will also be a key determinant of success. Related to that, realising the value of a merger often comes down to the extent to which there are clear incentives to collaborate and refer work, and to provide the consistency of service that clients require – arguably harder to achieve through a verein versus a fully-integrated structure.’
Mark Rigotti, joint chief executive, Herbert Smith Freehills
A way forward
‘CMS is well run and has a serious European platform. Adding top-class technology and real estate practices makes sense, especially so if you can get incremental revenue and some cost savings. Inevitably there will be client conflicts and some partners who do not like it, but you can’t make an omelette without breaking eggs. Executing it really well is a huge job. If that is done, and the markets do not produce too much in the way of headwinds, it could be a great way forward for all three firms.’
Charles Martin, senior partner, Macfarlanes
The power of three
‘It makes complete strategic sense looking at the practices of the three firms. Although there is criticism, other firms will really wish they could have done it. Not every single partner at Nabarro, CMS and Olswang is going to think it’s a great idea, but I think, self evidently, it is.’
Joe Andrew, chair, Dentons
The pay-off
‘It will be easier to gauge its relative success once the dust has settled. A lot of the talk until this point has been about the potential cost savings, but the real indicator of its success will be cultural affinity. Will multiple major firms be able to seamlessly assimilate their cultures? It’s a difficult thing to achieve, as any managing partner who has experienced a merger will tell you, but the rewards could be spectacular. Thoughts also turn to whether this could signal the start of the mega-merger.’
David Pollitt, managing partner, DAC Beachcroft
For further coverage of the CMS Cameron McKenna/Nabarro/Olswang merger, go to ‘I didn’t see anyone not put their hand up’: CMS, Olswang, Nabarro vote for merger