Pinsents sets out defence in dispute over Spanish partner hires from former merger target

Pinsent Masons has set out its defence to a lawsuit filed by Spain’s Ramon & Cajal over a team of partners who moved between the firms following failed merger talks.

The Spanish firm sued Pinsents after the firm hired a group of its partners and associates to launch a Madrid office following unsuccessful merger negotiations last year.

Ramon claims that the hires breached a memorandum of understanding (MOU) which included a “non-hiring clause”, and a non-disclosure agreement (NDA) which contained a “no solicitation” clause.

In the UK firm’s defence, filed today (5 December) at the High Court, the firm argues that the MOU between the two firms was not signed by Pinsents.

The lawsuit stems from talks held between the two firms in 2016, prior to which they had an informal relationship which had been established in late 2013 by Pinsents TMT head Clive Seddon and Ramon partner Diego Lozano.

In February 2016, Pinsents approached Ramon about working towards a more formal relationship with the view to a potential future merger.

Pinsents subsequently prepared the first draft of a proposed MOU for a three-year ‘preferred law firm’ relationship, with Lozano requesting the inclusion of a 12-month ‘non-hiring’ clause, which he discussed with Seddon.

Seddon presented a proposed draft of the non-hiring clause to Lozano, but the claim states that when Seddon emailed Pinsents managing partner John Cleland to ask if he was happy to sign the MOU with the amendments, Cleland said he did not consider the the non-hiring clause to be appropriate, and that he would require board authority to agree to such a restriction.

Cleland – who the claim states believed that at the time that the MOU had been signed –  subsequently emailed Lozano to ask that the non-hiring provision be reduced to six months rather than a year.

The claim states that the MOU was never signed by Pinsents, and when a full merger between the two firms was proposed in mid-July 2016, Cleland told Lozano that “the parties should not waste further time on seeking to agree the terms of the MOU”.

The proposed merger was rejected by Ramon’s partners in late December, with only three – including Lozano and fellow corporate partner Sanchez Montero – voting in favour of a deal.

The claim argues that the five partners that subsequently left Ramon to join Pinsents were not solicited but rather, independently approached Pinsents to ask to join as founding members of the UK firm’s Madrid office. It states that in rejecting the merger proposal, Ramon’s partners “ought reasonably” to have forseen that there was a risk that partners “in the most internationally focused practice groups” would leave to join a global law firm.

Ramon has also argued that Pinsents made use of confidential information provided during the merger talks, but in its defence, Pinsents claims that their existing referral relationship would have meant that the details in the NDA would have already been known to Pinsents.

Ramon is being represented by Quinn Emanuel Urquhart & Sullivan partner Richard East, while Pinsents has turned to Ashurst litigation partner James Levy. Ashurst has instructed Blackstone Chambers employment junior Thomas Croxford.

Pinsents opened its Madrid office in May this year 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.