Norton Rose Wants U.S., China Law Firm Mergers, CEO Says
Norton Rose Group (324346L), the 2,900-lawyer firm combining U.K., Australian, Canadian, South African and affiliated partnerships, is looking for mergers in the U.S. and China, Chief Executive Officer Peter Martyr said.
“I see the world as two pillars, China and the States,” he said in an interview. “To be a global business you need to have both of those pillars. What we already have is the hammock that swings between them now.”
London-based Norton Rose has grown from 1,200 lawyers in 2009 by merging with four firms through a so-called verein structure, maintaining separate finances. Asia’s largest legal group King & Wood Mallesons was formed last month with a similar arrangement between Chinese and Australian firms. Both groups aim to challenge the world’s largest law firms, U.S.-based DLA Piper (1191L) and Baker & McKenzie (1111L).
Norton Rose’s transformation has changed how other law firms see it, said Martyr who was appointed Jan. 1 to a second three-year term. While it isn’t in merger negotiations with any U.S. firms now, he said he receives visits from six or seven a year, and “we’re constantly talking to other people.”
Any U.S. partner would have to have a strong New York presence, Martyr said, as a global law firm needs to be in the world’s capital market centers.
“You have to be in the States,” he said, noting that he’s said such a merger should occur within two to five years for the past four years. “If the right thing comes along at the right time, we’ll do it.”
Anshan Iron and Steel
Martyr, 57, said that Norton Rose, which has offices in Beijing, Shanghai and Hong Kong, hasn’t had any talks with Chinese firms and the legal market in China isn’t yet mature.
“I don’t think the market is settled,” he said. “We retain good relationships with a big handful of firms there. I don’t think we need to force the pace.”
Other clients include Allied Gold Mining (ALD), a gold explorer in Papua New Guinea and the Solomon Islands, which it advised on its restructuring and listing on the London, Australian and Toronto stock exchanges last year. The law firm also advised Chevron Corp. (CVX) on all the shipping aspects of its A$43 billion liquefied natural gas Gorgon project off northwest Australia.
“We were initially invited to handle a discrete part of the project but ultimately a team from our London, Singapore and Australia offices are providing a series of services to the project sponsor,” Martyr said, referring to the Gorgon project.
“Fundamentally Brazil’s not such a difficult place to operate as India where you’ve got that incredibly complex civil- service kind of mentality, one million lawyers,” he said.
That will be much slower to unravel than Brazil, where current restrictions may be related to the bonanza of soccer World Cup and Olympic Games related legal work that local lawyers want to service, Martyr said.
The verein structure allowing for central management of functions such as technology and marketing has been used by Baker & McKenzie and DLA Piper and lauded by Stuart Fuller, global managing partner of King & Wood Mallesons, as a model for international law firms where different cultures can coexist.
Martyr said that Baker & McKenzie, which was denigrated by other law firms for many years as being a franchise, was ahead of its time and its immediate past chairman John Conroy has created ‘a proper global business.’’ DLA too, has “created a very powerful brand,” he said.
Norton Rose’s combinations with Australia’s Deacons, South Africa’s Deneys Reitz and Ogilvy Renault (1447L) and Macleod Dixon of Canada are no different from a full financial, total merger, according to Martyr.
“You can’t half do something,” he said. “If you can’t commit 100 percent on day one, then either you’ve got an association or you’ve got a potential disaster on your hands.”
There’s no trial period and financial integration isn’t stage two of the combination, he said. The technical challenge is how to manage currency fluctuations, although the London partnership has already dealt with that with the Euro in recent years, Martyr said.
Group revenue figures for the year ended April 30 are estimated to be around $1.3 billion. That compares with 314 million pounds ($464 million) for the London firm in the year before it combined with Deacons.
“If we weren’t sentimentally disposed to being capable of being held in one single unitary business, we would not have done the deal,” he said of the Australian merger.
“If it makes the boat go faster, then we’d do it. We deliberately didn’t set a time scale.”
To contact the editor responsible for this story: Douglas Wong at email@example.com