In early August, The Lawyer published a credible report that Ashurst had set up an internal working group of some 25-30 partners to work on plans for an Australian presence. According to The Lawyer, the plan is an attempt to boost the firm’s access to the Asian market – its revenue in the region rose by 50 per cent in the 2010-11 financial year, making up 7 per cent of global income.
The same report suggested that Ashurst would vote on the merger in “early Autumn”, which, according to the FS Bureau of Meteorology, means mid-to-late September. But wouldn’t Ashurst vote first, get partnership approval, and then approach Blakes? Apparently not, if the arrival of Squire Sanders in Perth is any indication. Minters’ Perth-based partnership voted to defect well before Squire Sanders’ partnership had assented to the link up on 17/8. It might well be the case that Blakes votes first and Ashurst second, which gets us to the tip-offs:
Tip 1
Not sure where you guys are getting your mail from, but it has never been about Herbert Smith. We have a referral agreement with Ashursts in London and there is plenty of talk amongst the partners I speak with about what the merger would mean for the firm. It would mean European secondments, so I am happy!
Tip 2 (last week)
Imminent vote on Blake Dawson/Ashurst tie up. Investigate.
Tip 3 (yesterday)
Suggest you contact Blake Dawson to ask about a partnership vote on the weekend of 20-21 August regarding an alliance/merger with UK firm Ashurst. I understand this has been approved and Blake Dawson may be doing a Deacons shortly.
True it is that Blakes and Ashurst currently enjoy an exclusive referral relationship. This means lots of partnership contact and plenty of international love, but is that enough for a merger? We took the advice of tipster #3 and asked Blake Dawson directly whether a merger vote occurred on 20/21 August. A spokesperson replied:
Thank you for your email. We do not comment on rumours in the market.
Great. Thanks for that Blakes.
The folks at Ashurst weren’t much better either. The firm’s head of communications said:
I can offer no comment on this.
Do you know more? Email us – news@firmspy.com
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What an odd combination. Not quite sure what either party gets from this. Blakes merging with a second tier UK firm… Ashurst merging with an Aussie firm with a minimal Asian presence… The current fad seems to be large, international firms… just as 10 years ago the fad (that never eventuated in full) was for accounting firms to tie-in with legal firms – for a ‘one-stop shop’… do clients really want this ? Don’t you select a professional services firm that is best fit for your needs in each market… ?
Tip 1: “It would mean European secondments, so I am happy!”.
It won’t be as easy (nor as frequent) as you may think.
Whilst it is questionable whether any of the top tier is of the same ilk as the MC, no top tier firm has to date officialised their exclusion through a partnership vote. If true, I believe it will be a step down for Blakes; I mean, BHP isn’t going to use MC in London and Silver Circle in Australia.
“Tip 1: “It would mean European secondments, so I am happy!”.
It won’t be as easy (nor as frequent) as you may think.”
Yes. And it denies lawyers the opportunities to move around on their own terms – firms will provide opportunities as and when it suits them. Even if you like your own firm, going OS is a good chance to take time out and smell the roses.
“Yes. And it denies lawyers the opportunities to move around on their own terms – firms will provide opportunities as and when it suits them. Even if you like your own firm, going OS is a good chance to take time out and smell the roses.”
Agreed. And at times quite a bit of politics could be involved. Much easier to just go OS.
I’d hardly call Ashurst “second tier”. Its got an excellent corporate practice although it sits just outside the MC. Given the MC isn’t interested in merging with Aus firms, its probably the best tie up available for them.
@ Avid Follower
I don’t agree. Blakes is significantly smaller than the other 5 top tiers (similarly, Ashurst is significantly smaller than the MC). On one view, that might make it more attractive to MC firms. But Ashurst isn’t exactly a second-rate outfit. RoF gives this (generous) description:
“Back in the nineties Ashurst was seen as pretty much the best firm at which to work in the City. The cliche was that it punched above its weight, with Magic Circle quality but mid-sized training. Its crown may have slipped a little since then, but it still remains one of the most highly regarded firms in the City.
…
Ashurst is predominantly a corporate and finance firm. It boasts a corporate department pretty much as good as any in the Magic Circle, with an MBO team better than all of them.”
@ Blixy
Taking the ruler off the transaction for the moment, my point is purely one of market perception.
At present, Blakes can no quicker claim MC equivalence than it can shrug off its top-tier annointment. The firm, as do a few others in the top-tier, labours under the officialdom of being a “top tier” firm. Anecdotally, however, the firm has been rotting from the east coast for years.
What the partnership vote represents, is a public signal of its internally perceived market position, or projected market position – ie Ozzie Ashursts. The firm could quite easily have continued on, with on-lookers blissfully unaware of its internal goings-on. However, if this vote be true, the porn star has played its hand.
Returning to our merger appraisal: personally I think the tie-up is perfect, as clearly no one at Blakes has the heart for the requisite root and branch review, or stewardship of an organic strategy.
Ashurst is a good firm with a challenging proposition. Its stellar corporate reputation was based on Charlie Geffen’s private equity practice, which really was very good (and the firm did “punch above its weight”) until every other non-MC UK firm and all the US firms in London chased down the same clients. It runs the risk of becoming indistinguishable from all of the other firms in that same space. Norton Rose, DLA anyone? Last December LegalWeek (the most gossipy of the UK’s legal journals) described Ashurst as “looking well off its game for over a year now without an obvious cause for its malaise”. Although Blakes aren’t especially wonderful either (notwithstanding what they think of themselves), so this seems like a perfectly sensible marriage between Plain Jane and Ordinary Oliver.
Ashurst have a “managed” lock-step, with management (Geffen) able to move people up and down based on performance. Probably works OK in a small, relatively tight partnership. Not sure how it will translate to this side of the world. (How does remuneration at Blakes work?)
An almost-but-not-quite magic circle firm joining with an almost-but-not-quite top tier firm.
Phil –
I don’t work at Blakes, but I’ve been told by one of the Partners that the Blakes model is based on a modified lock-step – with 7 or so levels. Not all Partners have equity, but most do. You can move up more than 1 level at a time (obviously for a stella performance), but underperformers drop down a maxmium of 1 level per year. Sorry I don’t have anything more specific…