Pinsents sued by Spanish firm Ramon & Cajal over Madrid partner hires after unsuccessful merger talks

Pinsent Masons is being sued by Spanish firm Ramon & Cajal, over allegations that it breached a number of agreements by hiring a team of its partners and associates following unsuccessful merger talks between the two firms.

Documents filed at London’s High Court detail the Spanish firm’s claim against Pinsents, which also names the firm’s senior partner Richard Foley, TMT head Clive Seddon and Madrid head and former Ramon board member Diego Lozano as defendants.

According to the claim, Pinsents and Ramon engaged in merger talks between October and December 2016, culminating in a merger offer made to Ramon on 19 December.

Ramon equity partners rejected the offer by a majority on 21 December. Managing partner Francisco Pala communicated the decision to Foley the following day and asked him to consider an alliance between the two firms instead, according to the document.

The claim states that between January and May 2017, Pinsents agreed to hire five Ramon partners, all seven of its full-time corporate associates and two banking associates.

It also states that Pinsents tried to hire Ramon banking partner Cristina Vida, but she rebuffed their approaches.

The partners that joined Pinsents were Lozano, who had played a key part in the negotiations between the two firms, corporate partners Sanchez Montero and Inmaculada Castello Bernabeu, finance partner Idoya Arteagabeitia and litigation partner Fernando Gutierrez.

Ramon argues that the hires breached a no-hiring provision contained in a memorandum of understanding between the two firms signed in July 2016, and also breached a non-solicitation provision in a non-disclosure agreement between the firms signed in October 2016.

It also claims that Pinsents used confidential data provided to them in the merger talks between the two firms, including which of its partners had the most profitable practice and which of its clients were the most profitable, in its solicitation of its lawyers.

According to the documents, Lozano and Sanchez Montero were two of the firm’s three most profitable partners.

As evidence of the alleged solicitation, the firm points to a presentation given by Seddon to a group of its associates at the Hesperia Hotel in Madrid, where he pitched Pinsents’ vision for its Madrid office in an attempt to get them to join the firm.

According to the documents, this included its intention to invest €10m (£8.8m) in its Madrid office with a view to engaging at least 60 lawyers in the forthcoming five years.

Ramon is claiming that, but for the defendants’ actions, its lawyers would still be working for the firm and generating profits, and that it is entitled to claim these lost profits in addition to any profits made by the defendants as a result of their breach of confidence.

It also claims that Lozano is obliged to disgorge to the firm any gain received by him as a result of his breach of duty to the firm.

A Pinsents spokesperson said: “We are disappointed by this litigation, which we do not believe has merit. As we build our business, we take great care to meet the responsibilities we agree to as part of our discussions with individuals and firms alike. We believe we have always met our responsibilities in relation to Ramon & Cajal and regret they have chosen to take this action. Given formal proceedings are underway, it would not be appropriate for us to make further comment.”

Ramon has instructed Quinn Emanuel Urquhart & Sullivan partner Richard East, while Pinsents has turned to Ashurst litigation partner James Levy.

Pinsents opened its Madrid office in May with the Ramon partner hires, who were joined by projects and construction partner Ricardo Garcia from construction firm OHL and construction partner Sofia Parra, who relocated from Pinsents’ London office.

Quinn declined to comment. Ramon was contacted for comment.