Commentary: Pinsents/Salans find the way but do they have the will to succeed?

In a claim that could also be made of many of its national rivals, there has been a sense in recent years that Pinsent Masons has been struggling to strike the right tone in its international strategy as the firm shifts its practice towards a more cosmopolitan outlook. After all, its recently-announced tie-up with Salans is not the UK firm’s first attempt to link with an international player. The question is whether this will deliver the solution the firm is looking for.

The alliance gives Pinsents access to 750 Salans lawyers across 21 offices – including 10 across Russia and Central and Eastern Europe alone. In contrast, Pinsents’ own PMLG international network, which was only launched in 2006, covered nine countries including the UK, while Pinsents pulled the plug on its projects joint venture with now-defunct US firm Thelen in 2007.

With Pinsents conceding that PMLG proved too fragmented to give the firm the consistency it was looking for, the Salans deal looks the pragmatic option. The non-exclusive referral agreement will see the firms pitching for work together, seconding lawyers, conducting joint training and, crucially, attempting to grow their respective revenues through work for new clients. Both stress the deal is not, at this stage, a precursor to a merger. The acid test will be the financial performance the alliance delivers. There are targets it will be judged against, with a termination clause built in that will allow the firms to walk away if it fails to meet expectations.

On paper the fit looks credible. For Pinsents, which has a presence in Asia and the Middle East, it means access to a well-established network across Europe. In particular, Salans’ respectable presence in Russia and the CIS sits well with Pinsents’ desire to expand its energy and construction strengths. Salans, meanwhile, admits it has struggled to achieve a significant UK profile, despite having built a near 100-lawyer practice, which it still expects to grow independently. They have some shared clients already – insurance group AXA being a notable example. However, the real intention is for each to add the other’s clients to its roster. Pinsents counts Barclays, Smith & Nephew, Amec, Siemens and Balfour Beatty among its trophy clients, while Salans works with the likes of GE, Pfizer and Deutsche Bank as well as Societe Generale and the European Bank for Reconstruction and Development.

So far so good. But there is still work to be done to turn a paper agreement into a significant working relationship. There is also the issue that the pair is planning to continue their existing relationships with other firms. Salans may still instruct some other UK firms with which it has existing relationships – perhaps surprising considering Pinsents’ full-service credentials. Given the deal is non-exclusive, there is room for disappointment if clients are underwhelmed or individual partners do not cross-refer. It is perhaps surprising that such a significant deal does not come with more exclusivity built in. But the bottom line to making these deals work is will – the lack of which has so often seen alliances fail in the legal sector. Pragmatism is one thing, but it will take real commitment if Pinsents is to make its international strategy a case of third time lucky.

georgina.stanley@legalweek.com

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Pinsent Masons and Salans - in quotes

"There are virtually no areas where we completely overlap and the alliance is very complementary in that respect. Infrastructure, for example, is one area where we have a very strong reputation and Salans has a great office network in key Russian, CIS and Eastern European locations where the infrastructure market will be huge for many years and we have no own-office presence on the ground. Overall, we firmly believe the alliance will enable us better to service our clients' needs in continental Europe, expand our relationships in European-wide and EMEA panels and collaborate to win new clients together."
Chris Mullen, senior partner, Pinsent Masons

"We see the association as a tool to gain access to clients in markets where we do not operate, such as the Gulf, or need to bolster our critical mass, such as the UK. How well it works will depend on the effort that everyone puts in."
Dariusz Oleszczuk, global managing partner, Salans

"It is an interesting move but I would question whether the scale of the offices would be sufficient to service Pinsents' more substantial clients globally."
Quentin Poole, senior partner, Wragge & Co

"This demonstrates Pinsents' increasing emphasis on being overseas. Their whole focus is very much international, this means they rapidly get greater coverage so it seems to be a logical step."
Managing partner, rival national firm

"You have either got to merge with a really good firm or have a best friends relationship with them. If what you want is spread, then this is a sensible move; if you want substance, then possibly not."
Partner, rival national firm

"It is pragmatic and sensible but I wouldn't read anything huge into it. It is not as big as opening new offices or a merger. This is all going to depend on how clients view the alliance."
Former partner, Pinsent Masons