The three-way tie-up between CMS, Nabarro and Olswang announced in October is the latest in a series of mergers to have hit the London legal market in recent years. We look at the impact of the merger on the firms’ trainee solicitors and their chances of securing newly qualified positions.
The merger of CMS, Nabarro and Olswang has created, in their words, a “new City powerhouse”. The combined firm will become the world’s sixth-largest law firm by headcount and the sixth largest by revenue in the UK.
Like all mergers, it has been followed by spin from the firm about what great news the merger is for clients and “our people”.
The first sign of the new firm living up to that is its confirmation that it will honour training contract offers when the three firms merge. This is clearly great news for those trainees.
What is less clear, of course, is how the merger will affect the quality of training experienced by the firms’ existing trainees and their chances of securing an NQ position at the end of their training contracts.
Looking first at how the merger may influence the chances of trainees being kept on as NQs, a starting point is to look at retention rates at each of the three firms over the past few years. This can be seen in the table below and makes interesting reading.
CMS, NABARRO & OLSWANG RETENTION RATES (2014 – 2016)
CMS Retention Rate
- 2014 63/89 (71%)
- 2015 36/55 (65%)
- 2016 38/56 (68%)
Nabarro Retention Rate
- 2014 21/24 (88%)
- 2015 19/22 (86%)
- 2016 23/27 (85%)
Olswang Retention Rate
- 2014 14/16 (88%)
- 2015 12/18 (67%)
- 2016 6/8 (75%)
As the table shows, CMS’s retention figures are quite low compared to its merger partners, ranging between 65% and 71%. By contrast, Nabarro has had a consistently high retention rate of between 85% and 88% over the past three years. Olswang’s retention rate has fluctuated wildly between 67% and 88%, though it would be foolhardy to draw too many conclusions from such a small sample size (especially in 2016).
RECENT MERGERS
As a clue to the future, it is instructive to look at how trainees have been affected by other recent mergers. In the two years before their merger with Gowling, Wragge Lawrence Graham kept on 77% and 72% of trainees respectively. In 2016, the first year since they joined forces, Gowling WLG retained 74% of trainees. In other words, no real change.
Again, we should warn against drawing many conclusions from this data, as the merger involved a tie-up between a UK and Canadian law firm with no real presence in the UK prior to the merger.
The 2014 merger between Charles Russell and Speechly Bircham may, therefore, be a more accurate indicator, and the figures paint a more encouraging picture. Charles Russell Speechlys retained 73% of its trainees in 2015 and 72% this year, compared to just 63% (Charles Russell) and 69% (Speechly Bircham) in the year prior to the merger. This is only a modest uplift, but reassuring nonetheless.
It is difficult to draw cast iron conclusions, but a tentative one is that the CMS merger could be good news for CMS trainees, neutral for Olswang trainees and possibly less good news for Nabarro trainees.
Turning now to the bigger picture, what effect can a merger have on an individual’s training and long-term opportunities?
In an article in The Lawyer, Andrew Leaitherland, managing partner at DWF, is quoted as saying that a merger presents significant benefits and advantages. “The merged firm may have greater resources and this can manifest in many ways: larger training budgets mean more opportunities for learning and development; more offices may mean opportunities for relocation; and a widening of service lines may provide greater scope to work in different practice areas,” he said. “The talented and ambitious trainee may well find that they are ideally suited to an acquisitive firm because of the career progression opportunities this presents.”
This view was supported in the article by Duncan Batchelor, graduate recruitment partner at Norton Rose Fulbright, who cited the opportunity for more client secondments and overseas seats for trainee solicitors as a result of his firm’s global growth.
THE AFFECT ON TRAINEES
Trainees at a merged firm will have a host of questions they need to consider if they are offered the chance to stay on as NQs. These include:
- Will the merger change the culture of the firm and working environment?
- Are more mergers planned, and if so, how might this change the firm further?
- How will the merger affect the practice area in which the trainee wishes to work, the quality of the work and the type of clients the firm acts for?
In the article in The Lawyer, Ben Higson, graduate recruitment partner at Hogan Lovells, suggested that lawyers applying for roles at merged firms should think of the benefits and “the exciting challenges and opportunities that working for a merged firm might bring”.
Andrew Leaitherland took this further: “The savvy candidate may even want to ask about opportunities to be involved in any of the cross-firm initiatives which inevitably arise post-merger and which are designed to facilitate integration,” he said.
Only time will tell what the future holds for trainee solicitors at Cameron McKenna Nabarro Olswang LLP, or ‘CMS’ as it will be known, thankfully. We for one will be watching with interest.