The possible rescue of the global firm’s European arm would be a strategic move in the case of Dentons.
Dentons, the world’s largest law firm by headcount, has emerged as a potential suitor for the whole of KWM’s Europe, UK and Middle East partnership, a report from Legal Business reveals.
Moreover, a report from The Lawyer says that Greenberg Traurig is also circling the embattled business unit’s partners, although a spokesperson for the US big law categorically denied that the firm had any interest in KWM EUME or a group of its partners.
“We have no interest and have not had one conversation relating to the acquisition of KWM’s EUME business, though we wish their lawyers and staff well. Greenberg Traurig is an opportunistic firm, and we always look at situations where our objectives of excellence, cultural fit, value and financial discipline can be advanced,” the spokesperson told The Lawyer.
Meanwhile, global law firm DLA Piper as well as New York firm Katten Muchin Rosenman are also said to have started talks with large numbers of partners at the firm.
According to Legal Business’ earlier report and confirmed by The Lawyer, leadership of Dentons and KWM’s EUME business are reportedly in merger discussions following the EUME arm’s failed rescue by the Chinese and Australian partnerships.
KWM operates under a Swiss verein with the Chinese, Australian and European units having independent management and financials. If Dentons buys the whole EUME unit, the 130 partners will be locked in, says an insider.
If successfully completed, the combination would be a strategic move for Dentons which itself is a product of a merger with a large Chinese law firm.
KWM was formed when Australia’s Mallesons Stephen Jaques merged with China’s King & Wood PRC before combining with the UK’s SJ Berwin. Meanwhile, Dentons which is also structured as a Swiss verein was formed by a three-way merger between big laws SNR Denton, Salans and Fraser Milner Casgrain before eventually combining with China’s Dacheng.
The move would see legacy Dacheng essentially take out their rival King & Wood from the London market.
Reportedly pushed against the wall by liquidity problems owing to the transactional nature of the partnership and its traditionally low capitalisation, the EUME arm’s newly elected leaders, managing partner Tim Bednall and senior partner Michael Cziesla, had secured a deal with the Chinese and Australian partnerships to prop up the sister unit.
However, the rescue plan was dependent on a majority of the EUME arm’s partners agreeing to a 12-month lock-in period with the firm and a commitment to support the partnership with an injection of cash. The lock-in was seen as a way for the firm to stop the recent spate of partners leaving the firm for other outfits.
KWM Europe confirmed last week that the recapitalisation plan had failed with not enough partners committing to the lock-in and the investment. The firm said then it was exploring other options including mergers in conjunction with help from its banks and financial advisers.
KWM may yet lose another high-profile City partner
Staff ‘fully expecting KWM to collapse’ in Europe