K&L Gates has announced it is discussing a possible merger with 300-lawyer Australian firm Middletons.
“Our leadership teams believe that the client-driven consolidation and globalization evident in the market for legal services will continue unabated and the potential synergies that would arise from the combination of our firms deserve (and are receiving) serious consideration,” said K&L Gates chairman and global managing partner Peter Kalis and Middletons national managing partner Nick Nichola, in a joint statement.

The firms have been in discussions for several months. Formal proposals are expected to be presented to both partnerships later this year.
Middletons, which has offices in Melbourne, Sydney, Brisbane, and Perth, competes in the Australian market with other mid-size firms like Gilbert + Tobin, HWL Ebsworth Lawyers and Sparke Helmore Lawyers. K&L Gates, which has 1,800 lawyers worldwide, ranked 17th by revenue this year on the AmLaw 100 report in May with a 2011 gross revenue of $1.06 billion. The firm also reported profit per equity partner to be about $890,000.
If completed, the deal will be the latest of several mergers and tie-ups that have transformed the Australian legal landscape over the past several months. Of the country’s six largest firms, four have entered into mergers or alliances this year. The Mallesons Stephen Jaques combined with Chinese firm King & Wood to form King & Wood Mallesons. The former Blake Dawson, Allens Arthur Robinson (now Allens), and Freehills signed deals with U.K. firms Ashurst, Linklaters, and Herbert Smith, respectively.
Interest in the Australian market among international firms has been driven by its growing integration with the economies of Asia. Australia’s energy and mineral wealth in particular have made it one of the top destinations for outbound investment from China, Japan, and Korea. K&L Gates has Asian offices in Beijing, Shanghai, Hong Kong, Singapore, Tokyo, Taipei and potentially South Korea (the firm announced in June that it has applied for a license practice there).

Both K&L Gates and Middletons have previous experience with mergers. The Pittsburgh firm Kirkpatrick & Lockhart combined with U.K. firm Nicholson Graham & Jones and Seattle’s Preston Gates & Ellis to become the present K&L Gates. Middletons undertook a three-way merger with Perth-based firms Salter Power and Franklyn Legal to establish a Western Australia presence in 2009. In March, the firm again merged with a Queensland firm Flower & Hart to build its Brisbane office.
Email: jseah@alm.com