Law firms abandon merger talks

LAW firms DWF and Cobbetts have ended merger talks.

Despite recent indications that the deal was progressing, it appears that Cobbetts partners have taken fright over the terms of the combination, which would have created a regional powerhouse with offices in Liverpool, Manchester, Leeds, Birmingham, Newcastle and London.

The link-up was first mooted last November when it emerged that DWF had registered the Internet domain name DWFCobbetts, but only confirmed less than two weeks ago on January 18, with brief statements from Cobbetts’ senior partner Stephen Benson and DWF’s managing partner Andrew Leaitherland, confirming talks were at an early stage..

A statement this week said: “The preliminary discussions between DWF and Cobbetts regarding a potential merger have now come to a conclusion and we have made the decision not to progress these talks any further due to the current uncertainty in market conditions.

“Growth by merger and lateral hires continues to be an option for both firms but until any discussions are brought to a conclusion, we will not be in a position to talk about them publicly.”

Boosted by its successful insurance litigation department DWF is among the fastest-growing regional firms.

Fee income climbed 15% during the 2010-11 financial year to £83m and net profits by 35% to £12m. Its partner headcount increased 31% from 120 to 157.

In its most recent financial year Cobbetts’ turnover was up slightly at £44.5m but net profits dipped by £500,000 to £10m.

The collapse of the deal will see Cobbetts’ managing partner Michael Shaw remain in his role – it was understood that he would have not been part of the senior management structure of the combined entity, while the rumoured departure to a London firm of Cobbetts Capital Markets team, led by Andrew Wright, may not now advance.