Lawrence Graham and Wragges in merger talks to create £170m firm

Lawrence Graham (LG) and Wragge & Co are in talks to merge in a move that would create a combined firm with turnover in excess of £170m.

Partners were told today (18th November) of plans for a union between the two firms, with a vote yet to be scheduled.

The tie-up would take the combined number of partners to 189 and combined turnover to £172.3m, putting the firm just outside the UK top 20, according to last year’s financial results.

LG has had talks with a number of firms in recent years, with discussions with Field Fisher Waterhouse called off last June after the firms were unable to come to an agreement. Despite the breakdown of talks, it is understood that both firms remained keen on a UK merger.

Wragges meanwhile has been seeking a London merger since 2011, looking for either a smaller firm with a number of niche practice areas or a London boutique. The firm reported a marginal increase in turnover at the end of the 2012-13 financial year to £120.5m, while profits per equity partner (PEP) climbed 2.7% to £339k.

LG has had a tough run in recent years, with its heavily real-estate focused business being hit hard by the downturn and revenues falling from a high point of £67.5m in 2007-08 to £51.8m this year. In 2005-06 they were the UK’s 32nd largest law firm by revenue, turning over £61.1m, before falling out of the Top 50 altogether in 2010-11.

Profits at LG have also plummeted, in part due to an onerous property deal which saw the firm move into new offices in More London right before the market turned. It has subsequently sub-let 20,000 sq ft of surplus space to Bond Dickinson, releasing it from much of the commitment, although some excess space remains. At the end of 2012-13, PEP was down 14.2% to £260k.

Although both firms have relatively sizable UK practices, there is little overlap internationally. LG has offices in Dubai, Monaco, Moscow and Singapore while Wragges is present in Brussels, Paris, Dubai and Guangzhou in addition to an IP-focused base in Munich.

Wragges senior partner Quentin Poole (pictured) said: “We have been open about our strategy and the fact that we are looking at opportunities to strengthen our ability to serve clients in strategic practice areas, sectors or locations, particularly in London.

“Lawrence Graham has an excellent reputation, particularly for real estate, equity capital markets, investment funds and private capital, and a strong, collegiate culture. We are exploring how clients might benefit from our two firms forming closer ties.”

LG senior partner Andrew Witts commented: “We have known the Wragge & Co senior management team for many years and we have always been very impressed by the passion that they have for their business, their people and their clients. We are particularly attracted to the quality of Wragge & Co’s major corporate client base and sector strength.

We are exploring the opportunity of combining our businesses, which are extremely complementary in terms of practice areas and international reach, with both firms gaining offices in three new jurisdictions, which is, we believe, a compelling proposition. Above all we are assessing the extent to which our service to clients might be enhanced by our two firms coming together.”