SJ Berwin's US strategy Part II – time to dance with... Proskauer Rose

With Orrick Herrington & Sutcliffe this week pulling the plug on a merger bid with SJ Berwin, the question now is whether the UK firm pushes on with its efforts to secure a US merger.

As best as can be gathered, it was never quite as simple as a two-way discussion with Orrick. As Legal Week reported in February, the City law firm had identified a small list of US firms - including Orrick - with which it intended to explore whether to pursue a transatlantic deal. Two other firms definitely on that list were Boston's Goodwin Procter and New York's Proskauer Rose.

With Orrick currently out of the running - though a cynic may not feel inclined to take the US firm's protestations at face value - attention is currently focused on Proskauer Rose. The firm was initially seen as the least likely partner but is now the sole US practice on SJ Berwin's radar. The talks remain at a relatively early stage but with the UK firm's strategy becoming increasingly public, neither party is expected to needlessly draw the process out.

A merger of Proskauer Rose and SJ Berwin would propel the pair into the global top 30 in revenue terms, creating a £600m practice according to the most recent financial data. The geographic fit works and the practice mix also looks viable, if not obvious, especially as the New York firm has in recent years moved to expand its practice beyond its labour law core into transactional areas. Proskauer undoubtedly has an interest in a sizeable UK deal having held fairly protracted merger discussions with the legacy Richards Butler five years ago.

The issue of a US deal, of course, remains finely balanced for SJ Berwin, with the firm coming off the back of a tough 2008-09 in which partner profit fell by 49%. On one hand there is a clear desire to achieve a period of recovery to secure a stronger negotiating hand in any potential deal. On the other, the window of opportunity that has been opened could just as easily and quickly snap shut.

If SJ Berwin's 2009-10 is a story of respectable recovery, which according to several partners it is, then the odds of a deal being reached in the near future will rise. The music is still playing for SJ Berwin but the dance partners will inevitably thin out as time goes by.

For more, see:

• SJ Berwin merger bid shifts towards Proskauer Rose
  
• SJ Berwin's US strategy - time to dance?
• SJ Berwin sounds out US firms as Stateside strategy moves up agenda