The news broke today that leading law firms Speechly Bircham and Withers are in preliminary talks about a merger. This raises the interesting question of what each has to gain from combining forces. At first glance, Speechlys seems to be the party that stand to benefit the most.
Speechlys had a tough financial year in 2011-12. The London-based firm’s total revenue fell from £59.5 million to £57.6 million, net profit from £14 million to £11 million, and average profit per equity partner dropped from £384,000 to £300,000. True, international expansion came in the form its first overseas offices opening in Zurich and Luxembourg, but the same financial year also saw Speechlys being dropped by its biggest client, RBS.
Interestingly, just 24 per cent of Speechly Bircham’s revenue during 2011-12 was generated by its private client department. It might be that in looking to merge with Withers, a top international firm that remains hard to beat for its family and tax and trust services, Speechlys wishes to benefit from its global reach and reputation among the UHNW community.
It is harder to see at this stage what Withers might stand to gain, although they are clearly on the look-out for new ventures at the moment, in keeping with their aim to keep up-to-date with the demanding UHNW marketplace. Earlier in the month, they announced the launch of a new non-legal consultancy service. Called the Withers Consulting Group, this will offer advice and support to UHNWs, family businesses and entrepreneurs.
The bolt-on will strengthen the firm’s already top-tier offering, as Withers’ managing director Margaret Robertson told Spear’s: ‘When combined with [our] international offices in the world’s key wealth management centres, we believe that this delivers a unique and much-needed service.’
Talks between the two firms are in extremely early stages, we are told, but it is not hard to see why Robertson’s firm is such an attractive proposition to Speechly.