(Illustration by Boguslaw Mazur/iStock)
Australia’s Henry Davis York and British firm Olswang both saw large groups of partners leave their ranks prior to unions with large firms.
Norton Rose Fulbright and Henry Davis York announced in June their intention to join forces. Earlier this week, rival Australian firm Corrs Chambers Westgarth confirmed its hire of five Henry Davis York partners in Sydney, as legal publications Downs Under noted the possibility of more senior exits ahead of an expected combination later this year.
Meanwhile, Olswang has shed almost one-third of its partnership prior to merging with CMS Cameron McKenna and Nabarro earlier this year. Records on file with the U.K.’s Companies House show that 28 partners left Olswang between May 1, 2016, and April 30, 2017, a number that equates to roughly 28 percent of the firm’s total partnership, based on its 2015-16 partner head count of 101.
Eleven of those exits were from Olswang’s London headquarters, while the other 17 were from the firm’s offices in Germany, Paris and Singapore. Olswang’s three-way merger with CMS and Nabarro went live on May 1 of this year after partners voted in favor of the deal in October 2016. Ahead of that tie-up, Olswang closed its offices in Brussels, Madrid and Paris.
Legacy partners at Olswang and Nabarro who stayed with the merged firm signed lock-in agreements that commit them to CMS until May 2018, although partners who were at CMS prior to the combination are not subject to the same restrictions. Such agreements are not unusual. When Morgan, Lewis & Bockius agreed to absorb the bulk of Bingham McCutchen in late 2014, partners at the latter signing on to the deal had to do so with the stipulation that they would forfeit their capital contributions if they left the combined firm within three years.
In June, CMS posted a 1 percent dip in its global gross revenue for 2016, a year in which it took in €999 million ($1.18 billion). The full contribution from CMS’ addition of Nabarro and Olswang will not be known until next year, when the combined firm’s gross revenues are expected to surpass €1.2 billion ($1.41 billion). A CMS spokesperson told London-based Legal Week that the partner departures from Olswang within the past year were not a factor in its recent combination.
“To give some context, a number of these departures took place well before merger discussions began and bear no relevance to the current firm,” CMS said. “As to be expected with a combination of our size, there were a small number of partners that were not able to accept offers as a result of conflicts or other issues. Looking forward, the combined firm is in a strong position and we are continuing to make the most of the opportunities that the merger presents.”
The loss of lawyers prior to any Big Law nuptial has become fairly commonplace in a robust lateral market. Earlier this month, Bloomberg Big Law Business reported on a group of eight Liner lawyers leaving the Los Angeles-based firm ahead of its merger with DLA Piper to form Pasich, a firm comprised of several Dickstein Shapiro alums.
And in early June, just before Norton Rose Fulbright completed its agreement with Henry Davis York, the global legal giant watched a group of 15 lawyers leave Chadbourne & Parke for Covington & Burling in Dubai, Johannesburg and London.
Norton Rose Fulbright and Chadbourne completed their own union on June 30, although another large group of Chadbourne lawyers, concerned about conflicts, decamped from the combined entity earlier this month for Winston & Strawn.