According to Legal Week, those conditions include:
[That] the 190-partner Blakes achieving set profitability and revenue targets in Australia. However, the full merger – which would result in a single global profit pool – is conditional upon a further vote by both partnerships, and will be initially considered in early 2014.
It is understood that Blakes’ profitability is already around 90% of that of Ashurst, which in 2010-11 achieved profits per equity partner of £723,000.
On that basis, Blakes needs to pull another 10% profit from somewhere which may or may not be code for “below market pay rises between now and 2014″. We invite your comments below. One thing is certain: Ashurst is now a major global law firm – the merger will nearly doubling its revenues and massively increasw its presence in the Asia-Pacific region. The tie-up will create a firm with approximately 420 partners operating under the Ashurst banner with combined revenue of over £550m (Blakes is currently responsible for revenue of around £250m).
In a statement obtained by Firm Spy, Blake Dawson chairman Mary Padbury commented:
Combining our operations with a leading international firm will deliver significant competitive opportunities for both businesses, a greatly expanded international capability for our clients and exciting career prospects for our people.
Meanwhile, Ashurst senior partner Charlie Geffen told Legal Week:
We think that the pace of change [in the global legal market] is going to become increasingly rapid. The premier firm of the future must have scale as well as quality – you are seeing this happen already and you have to be one thing or the other… This is a change of direction. It’s a big moment for the firm, it’s an exciting moment.
Another senior Ashurst partner, Geoffrey Green, will chair a committee that will oversee the combined Ashurst Asian operation. He observed:
Our firms have worked together successfully in Asia for nearly 10 years. The combination is a natural development of our relationship… We look forward to full integration.
For those keeping score at home, this merger comes after a period of prottracted international interest in the Australian legal market, with the arrival of Norton Rose, Allen & Overy, DLA Piper and Clifford Chance.
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… and they’re changing their name to Ashurst?! Prior to full financial integration?!
“Hey Ashurst, if you’re done serving yourself, could you please pass the albatross?”
So if they do not vote to financially integrate in 2014, do they re-brand to Blake Dawson… ?
Makes very little sense to me. Looks like heaps of Aussie firms playing “I have a bigger one than you do”. You wonder how many of these international marriages are driven by egeo?
So what will the make up of the top 6 look like? Would Blakes still be considered top tier (and presumably the largest and most profitable), or will it be grouped as “one of the international firms”? If the latter, will there still be a “top 6″ in the Australian legal landscape? Will one of the other firms (Corrs, Norton Rose) step up and fill the last top? Or will be have the “big 5″????
Surely the other top tiers will now be scrambling for deals of their own. I think we’ll still have the australian “top 6″ but they’ll each be aligned with/part of a global firm. Now that blakes has set the trend, for any of them not to be able to offer a global network would surely be suicide? We’ve already seen chunks taken out of clutz and minters…
I agree there is a major opportunity for a “mid tier” to scoop the domestic pool in terms of disaffected Oz clients and the remnants of practice areas that internatonal firms don’t want or need.
Re Dave – if it fails to financially integrate in 2014, Ashurst Australia will be rebranded to AssHurts.
BD / A will remain full service. Why risk losing clients during a protracted merger when that extra 10% is crucial to sealing the deal?
‘Top 6′ is based on estimated gross revenue and awards / recognition for best practices. If BD’s revenues consistently trend south after the merger, then ‘top-tier’ *snooze, yawn* labeling on Wikipedia really won’t be important.
I wonder whether this merger will have the same impacts as the DLA merger, particularly in the Commonwealth Govt. sector – DLA seriously downsized its gov offering because the practice wasn’t seen as being profitable enough to meet the budgets required internationally. Interesting times for the mid tier – especially the ones that have had recent growth Norton Rose, Sparke Helmore, Ebsworth etc
We have done our due diligence and found that Ashley Hurst is indeed not the name of a gay porn actor. If anyone with that name enters the adult film industry between now and 2014, they will feel the full force of our IP lawyers.
@Blake Dawson Marketing Dept
Unless she’s into [REDACTED], in which case she would be a good representative for the firm.
To anon above, of course it will – the global firms require huge profitability to be sustainable, below rack rates is never going to cut the mustard and that is what the gov’t clients expect
I was one of the 160 sacked by Blakes in 09 (while they were busy spending money opening offices in Adelaide, Singapore and Tokyo) – at the time we were told times were tough (poor parters only on $900 000 per year …boo hoo). This week I received not a hard copy note through the mail from the genius brigade running the joint bragging about this merger and outlining the strength of the firm.
A definite kick to the heads of those they sacked.
My care factor for Blakes is less than zero, but surely they could have thought abit about this before blanket mailling everyone ever connected to the firm.
Anyone know what happens to the technology business?
In light of Blakes history of sacking staff (in 2009), does anyone have an opinion of whether having to reach certain profits for the merger to go ahead may lead to more sacking? and higher billables / longer hours / weekends …
With the Aussie dollar free falling, the financial target is getting larger and larger…
To Joe above, mate of course this will mean more pressure. There always is. We were working like dogs in 09 and still got shafted. When some of the Blakes leadership committee went to donate blood recently, the nurse told them that they were better off going down the local pub and donating the ice in their veins.
Any merger results in some staff sackings – if I were still at Blakes I would be actively looking. Remember they lied to us in 09 and said mining would save the firm and yet they still sacked staff. They have no track record.
Anon is correct – the Aussie dollar is never going to stay at its current levels long term (hope you have all done your share of online shopping..) and Ashursts would be mad to pay any partner in Aus as much as someone in London. This is one of the biggest gripes amongst firms like Bakers and DLA Piper – a partner doing a piddly $2 billion deal here just does not even feature in the Billion pound central deals of London, HK and NY.