Key events so far
- CMS, Nabarro and Olswang have formally confirmed they are in merger talks. See 12.48 for the full statement.
- Merger would create the eighth largest UK firm by revenue.
- CMS is looking to bring Nabarro and Olswang lawyers into its Cannon Place offices.
17.41 – The end…(for now)
Thanks to everyone who followed the live blog today. Check back on The Lawyer next week for even more exclusive news on the merger.
16.57
CMS to bring Olswang and Nabarro into Cannon Place? The Lawyer can reveal that CMS’s landlord has put all leasing deals on ice as the law firm looks to bring Nabarro and Olswang lawyers in to its offices.
There are currently four empty floors at CMS HQ Cannon Place, The Lawyer understands.
Savills and CBRE had been punting them out to various companies in recent weeks, but were ordered today put the various deals on hold.
15.24
The Lawyer reporter Jonathon Manning comments on news the combined firm would be the UK’s eighth largest by revenue:
According to data in The Lawyer’s UK 200 report CMS is the ninth biggest firm based on its 2015/16 revenue of £753.1m.
The firm’s senior management are understood to have aspirations of growing the business into a top five firm but even after the merger it would be a long way off achieving its goal.
Combined, the new firm’s total revenue would hit £977m once Nabarro’s turnover of £130.4m and Olswang’s £112.5m revenue are brought into the mix. Yet after pulling off one of the legal market’s few three-way mergers CMS would only move up one spot to eighth place in the rankings.
The firm would successfully overtake Herbert Smith Freehills but to reach that coveted fifth place CMS will need to get its turnover up to £1.3bn.
14.54
Another merger! Slightly less ‘hold the front page’, though. Chafes of Cheshire and Hague Lambert of Lancashire have also chosen today to announce a tie-up. The new firm will have 10 partners and offices in Alderley Edge, Knutsford, Macclesfield, New Mills, Urmston, and Wilmslow, along with a combined annual turnover in the region of £5m.
“This is great news for our clients, partners and staff,” says Hague Lambert senior partner Nigel Day.
Perhaps not the biggest merger of the day, however.
14.22
Business services redundancies? Lawyer headcount is one thing, but the numerous teams of business services and support professionals at CMS, Nabarro and Olswang will be significantly affected by a merger.
When CMS merged with Dundas & Wilson in 2014, it cut 60 UK roles in one go.
A spokesperson for CMS UK at the time said: “With any combination it is regrettably to be expected that there are some duplication of roles resulting in redundancy.”
|
Number of non-fee earning staff (2016) |
|
|
CMS |
1734.8 |
|
Olswang |
263 |
|
Nabarro |
313 |
|
Combined firm |
2310.8 |
13.47
The Lawyer’s deputy editor Matt Byrne comments on the merger talks:
So what does a “differentiated, modern” law firm look like? This, apparently, is what CMS, Nabarro and Olswang’s management teams are aiming for should they pull off their three-way merger.
As we exclusively revealed yesterday, a three-way merger is potentially on the cards. Already there are signs that this merger will be a structurally unusual one – rumours are already swirling a series of boutiques will be created or partners will swap between the three firms.
One firm that knows all about ‘atypical’ is Dentons, famously the world’s first ‘polycentric’ law firm. Dentons is also a firm that has pulled off a three-way merger, when SNR Denton merged with Salans and Fraser Milner Casgrain in 2013.
But there are big differences between Dentons and this CMS-led threesome. In short, management.
Whatever Dentons might claim about its polycentricity (is this even a word?), the firm is led from the US and by global chairman Joe Andrew and global CEO Elliot Portnoy.
CMS? Nowhere near so clear cut in terms of firm-wide leadership. Are the Germans on board with this deal? Is the rest of the network? And where will a massively ramped up UK and London presence leave senior partner CMS in its quest for a US merger partner.
This deal is not done yet.
12.48 – It’s official!
Here is the joint statement from the leadership teams at CMS, Nabarro and Olswang
“We can confirm that the leadership of CMS, Nabarro and Olswang are in discussions about a potential combination.
The leadership consider this combination would create a differentiated, modern firm that would combine scale with an exceptional depth of sector expertise.
The combined firm would provide clients with a stronger and more global platform served by 65 offices across 36 countries, underpinned by a 250 year City heritage.
There should be no assumption as to the outcome of these discussions and we will update in due course.”
12.43
A reminder that The Lawyer understands this merger is going to be an atypical one in terms of structure – perhaps involving the creation of a spin-off firm, and possibly involving a “carve-up” of Olswang and Nabarro, with some partners swapping between the two firms or heading to CMS.
Lawyers at the three firms being shuffled like a deck of playing cards?
12.38
Who would lead the firm post-merger? The Lawyer reporter Jonathon Manning runs through the possible options. Read about the likely candidates here.
12.24
Breaking news: We’re hearing that an announcement is imminent from both CMS and Nabarro.
Partners at Nabarro have concluded their meeting on the topic.
12.17
Some interesting stats emerging on what the new combined firm would look like…
|
Revenue |
£978,059,932 |
|
RPL |
£291,201.93 |
|
PEP |
£462,186.78 |
|
Number of lawyers |
3358.7 |
|
Number of partners |
998.1 |
- It would be the eighth largest UK firm by revenue, effectively overtaking Herbert Smith Freehills
- It would be the second largest UK firm by number of lawyers, behind DLA Piper
- It would be the third largest UK firm by the number of partners behind DLA Piper and Norton Rose Fulbright
12.15
A Boosh-inspired name suggestion…
CMS Naboo pic.twitter.com/m9TUMbBypD
— Gavriel Hollander (@Gavhollander) September 29, 2016
12.09
Sources in the market have spoken of a headhunter “feeding frenzy” as partners decide whether to join the merger and management decides which partners will be locked-in and who will be expendable should the merger go ahead.
Many expect several boutiques to spin off from the merger, potentially focusing on TMT and real estate work.
12.04
A three-year comparison of revenues:
11.52
What will the new firm be called? The good folk of Twitter, as you might expect, have some suggestions.
"SNOSWANG" The BFG of law firms.
— Robert Lands (@TweetLands) September 30, 2016
Anagramatically, CMS Olswang Nabarro could give you "Gross Carbon Man Law". Also "Brown Glans Sarcoma" https://t.co/vQl7Wui2ck
— Alex Newman (@AlexNewman_IC) September 29, 2016
Cameron Nabbaro's Wang
— Nick (@_nber) September 29, 2016
11.32
A source told The Lawyer it has been “well-known” that CMS senior partner Penelope Warne has “long aimed to grow CMS into a top five UK firm”.
With the Olswang and Nabarro merger set to bring its global revenue up to £997m, it looks like this deal is the solution CMS has been waiting for.
Earlier this year Warne denied to The Lawyer CMS was in talks with Olswang.
11.30
11.29
Students who have secured training contract places at CMS, Nabarro and Olswang are questioning what will happen to their future places should the merger go through on various blogs and websites.
Read our post: What happens to a firm’s future trainees when it goes through a merger?
Over at our student publication Lawyer 2B, editor Richard Simmons recalls the example of DWF, which saw its trainee intake increase by 411 per cent in six years after a spate of mergers.
11.26
“The new Dentons”. A number of market sources have compared the proposed merger to Dentons’ similar three-way combination in 2013.
Salans, SNR Denton and Canadian firm Fraser Milner Casgrain joined forces as a Swiss Verein under the Dentons banner. Three years on and Dentons is the biggest law firm on the planet with approximately 7,300 lawyers.
11.15
There was much speculation on Thursday afternoon about who the “mystery third firm” tying up with Olswang and Nabarro could be.
Read our story, written as the mystery deepened: Olswang and Nabarro to merge with “mystery third firm”
11.12
Lockdown continues. CMS, Nabarro and Olswang have all yet to respond to the news its partners are voting on a historic three-way merger today. For the last 24 hours, no member of senior management or press officer has picked up their phone or responded to emails.
11.00
Speculation is rife that the three-way merger will involve a “carve-up” of Olswang and Nabarro, with some partners swapping between the two firms or heading to CMS, and some partners launching a TMT boutique.
09.42
The Lawyer has been following Olswang’s attempt to secure a merger since the start of this year, when CEO Paul Stevens told the partnership at its January conference it had approached a number of firms. At the time, these firms were understood to be Bird & Bird and Simmons & Simmons. Both firms rebuffed the advances.
Here is the full list of stories following the merger talks throughout 2016…
29 Sept: CMS to merge with Olswang and Nabarro subject to vote
29 Sept: Olswang three-way merger imminent
12 Sept: Nabarro enters race for shrinking Olswang as CMS has second thoughts
20 July: Wedding bells? CMS circles Olswang in merger bid
9 Feb: Olswang on merger hunt as 2Birds and Simmons targeted
09.00
Welcome to The Lawyer’s live-blog on the historic three-way merger of CMS/Olswang/Nabarro (CMS Nabbarwang?).
Partners at all three firms are understood to be attending firmwide meetings this morning.
We’ll be keeping you updated throughout the day.
