Following in the footsteps of Stamford Law Corporation, Harry Elias Partnership (HEP) has become the latest Singapore law firm to enter into a full financial merger with a global brand, in this case Eversheds Sutherland. The new entity, which recently received regulatory approval and is set to launch May 1, will be known as Eversheds Harry Elias (EHE). It will be helmed by Philip Fong, who is the current managing partner of HEP.
Almost two years in the making, the merger comes at a busy time for Eversheds, which only recently completed a transatlantic merger with U.S.-based Sutherland Asbill & Brennan, creating a 2,300-lawyer firm with revenues in excess of $750 million. Talks with HEP, a 90-lawyer outfit in Singapore and Brunei well-known for its disputes work, began in 2015. The two parties signalled they were close to tying the knot after Eversheds moved into the SGX Centre, the building housing HEP’s Singapore office, in September 2016.
For Eversheds Sutherland, the merger offers, first and foremost, local law capabilities. “One of the key benefits from this merger is the ability to participate meaningfully in cases involving Singapore law,” said Stephen Kitts, the firm’s Asia managing partner. “This is particularly important for Eversheds-Sutherland’s major global clients, including international investment banks and other financial services organisations, a number of which have their Asia or regional headquarters in Singapore.”
On the other hand, for HEP, a middleweight Singapore law firm with big ambitions, the merger thrusts it into the global spotlight. “Eversheds is a bespoke international law firm,” said Fong. “Harry Elias Partnership has been a Singapore-centric business. [It] will benefit from being grafted into an established network of international practices within the Eversheds family and from getting access to [the] spectra of expertise within Eversheds to provide greater fire power in servicing clients locally and regionally. We will be able to tap into an immense store of legal knowledge and technology.”
There are a number of ways that an international law firm and a domestic law firm can work together in Singapore’s increasingly competitive legal market. Joint law ventures (JLVs) and formal law alliances (FLAs) are among the more popular ones, but EHE eschewed both in favour of what it calls a “transformative merger”, or full financial integration. At present, the only other merger in Singapore known to head down that path is Morgan Lewis Stamford, which brought together local law firm Stamford Law Corporation and the U.S.-headquartered Morgan Lewis & Bockius.
For EHE, this will mean the Eversheds Sutherland Singapore office and business being transferred to HEP, with the international partner acquiring a minority stake (reportedly 33 percent) in the merged firm. “We will create a framework to deliver growth and generate significant economies of scale,” said Kitts, adding that the merged firm will leverage on Eversheds’ and Sutherland’s global name as well as the goodwill HEP has garnered in Singapore for over 27 years.
Kitts noted that the HEP and Eversheds Sutherland partners spent “considerable time” debating the strengths and weaknesses of various business structures, including FLA and JLV. “The strategic goal for both firms was to identify the best structure that would support long-term, sustainable and profitable growth,” he said. “During these discussions, it quickly became apparent that there was both a cultural alignment and common goals and ambitions. Due diligence was undertaken and, in parallel, both firms made a number of cross-referrals. This, in turn, gave everyone the confidence that a transformational merger was the best strategy.”
“The key consideration was: Of these three modes of collaboration, which mode would provide the best chance of fulfilling a key objective of both firms, which is to create a business that is profitable and sustainable?” said Fong. “It was felt that a merger [instead of] a JLV or FLA was the best option, given the make-up of the firms’ practice groups and practice group leaders, the culture/ethos/mindset of the key decision makers, and the perceived business prospects of the legal industry in the region.”
FIRST THINGS FIRST
According to Fong, one of the initial concerns is to ensure that existing business operations are not disrupted and will continue seamlessly throughout the integration. “Another key priority is to speedily inform present and potential local and foreign clients of the new combination as well as the new offerings and capabilities,” he said. “Yet another priority is to ensure that lawyers and staff coming from each firm get familiar with one another quickly so that we can develop a close understanding relationship forthwith and leverage on one another’s strengths and networks.”
For Kitts, the immediate priority will be to ensure that teams get to know one another and integrate effectively. “We will also need to transition clients, of course, and begin a concerted business development and marketing campaign to promote the new firm in the local and regional markets,” he said. “These plans are already well-advanced and discussions are under way with some of the largest clients of both firms. There remains much to do on the ‘back office’ side, of course, as we combine Eversheds Sutherland’s international experience and Harry Elias’ local market knowledge.”
The merged firm is expected to have more than 100 lawyers and fee earners, including 29 partners. However, integration is not expected to be a big problem. “EHE is a Singapore firm comprising mainly of HEP staff and lawyers,” said Fong. “HEP is a strong firm with good corporate values, sound financials and a vibrant people-centred working environment. This combination will certainly not affect the merged firm in terms of its ability to service its clients in the short term or long term. If anything, the combination will enhance and broaden the firm’s existing abilities.”
That said, he acknowledges that the process will take time and effort. “An integration plan is already in place to smoothen out the process,” said Fong. “All the partners and lawyers of the firm fully support the merger and are looking forward to be part of the new-set up in the Eversheds family.”
He added that the Harry Elias brand “is and will remain a powerful brand” in Singapore. “As such, [it] will be retained, albeit combined with the Eversheds brand,” said Fong. “This is necessary if we wish to go into and grow on the international stage, where the Eversheds name is well-known and recognised.”