Pinsent Masons and McGrigors confirmed in early February that partners had voted in favour of the two firms merging. The new firm will operate from 1 May as one unified partnership under the Pinsent Masons brand.
Management says that the combination will likely see the creation of a near £300m, 1,500 lawyer business spanning 15 offices, seven of which are outside of the UK.
Both firms denied that any partnership restructuring would take place prior to the merger other than the usual performance management. But four partners have already left Pinsents’ LLP so far this year according to Companies House.
McGrigors stated categorically that the firm had not cut partners because of the merger talks. However, it did confirm that it has put roughly 20 equity partners into a ‘transitional’ stage ahead of the deal. The transitional partners, who make up around a third of the current equity, will be treated as salaried partners for now before potentially being moved back into the full equity within two years of the merger, if they can prove their contribution to the firm.
‘We felt that there was room in the market for a firm of a certain size that offered a complete banking service.’
Richard Masters, McGrigors
On the face of it, an arbitrary decision to place almost a third of the Scots firm’s equity into an effective holding pattern is understandable given the discrepancy in profitability. According to the LB100, Pinsents’ profit per lawyer stands at £43,000 while McGrigors’ is £32,000. This translates to respective profits per equity partner of £404,000 and £247,000.
This manipulation of the partnership appears to reflect a genuine will to make the union work. Both firms can see that their respective markets are shrinking and they need scale to differentiate themselves from the competition.
McGrigors in particular has been looking to shed its Scots tag for some time now. Moves into Doha and an outpost in the Falkland Islands, common among energy-focused Scottish firms, are the extent of its international network but in conjunction with Pinsents’ burgeoning Middle East practice there is a decent platform from which to build. Both McGrigors managing partner Richard Masters and Pinsents senior partner Chris Mullen said that Asia will be a focus, with plans to also open in France and Germany in 2012.
‘In the short to medium term, our international development will take the form of establishing ourselves in France and Germany,’ said Mullen. ‘We will fill out the capabilities of McGrigors’ Qatar office as a complementary fit with Pinsent Masons’ Dubai office and look at how we can best take advantage of our Singapore presence to benefit the firm’s oil and gas client base.’
The combined firm will boast market-leading oil and gas and construction teams as well as solid corporate offerings in and outside of London. Banking is one particular area that management believes it can exploit further.
‘One of the things we looked at with this deal was the shrinkage of bank panels and we felt that there was room in the market for a firm of a certain size that offered a complete banking service to clients all the way to the top tier,’ said Masters.
The new look management team will see the two top jobs go to Pinsents lawyers. Mullen and managing partner David Ryan will take the senior roles at the merged firm. Masters will become head of client operations. Current Pinsents finance director Steve Hancock will reprise his role, while Alastair Morrison, also from the Pinsents side, will be head of client strategy.
The firm will also have a non-executive board comprising two partners each from the legacy firms.