June 23, 2009 2:54 PM
Norton Rose Acquiring Australia's Deacons
Posted by Anthony Lin
U.K. law firm Norton Rose has agreed to acquire Australia's Deacons, expanding its presence in the Asia-Pacific region by over 500 lawyers. Approved by votes at both partnerships on Monday, the tie-up will be the largest to date in the region.
"We are making a deliberate play to become one of the leaders in the Asia Pacific region," Norton Rose chief executive Peter Martyr says. "We think there's a limited window for that."
Deacons Australia, which has an association agreement with the Hong Kong law firm of the same name that expires later this year, will officially become part of Norton Rose Group on Jan. 1, 2010. Martyr will become group chief executive of the combined firm while present Deacons Australia chief executive Don Boyd will become deputy group chief executive. Norton Rose chairman Stephen Parish will continue as chairman of the combined firm.
The combined firm will have 1,800 lawyers in 29 offices, 12 of which will be in Asia or Australia. The Deacons group will contribute new Norton Rose offices in Sydney, Melbourne, Perth, Canberra, and Brisbane and bolster existing ones in Jakarta and Singapore, where Norton was last year named one of six foreign firms licensed to practice local law. The London-based firm's other offices include Amsterdam, Paris, Moscow, Beijing, and Tokyo.
The merger announcement comes amid a continuing global recession that has hit Asia along with Europe and the United States. But Martyr says he thinks the timing of the combination would be "spot on," as Asia, particularly China, is now beginning to show signs of recovery. By the beginning of next year, he says, Asian economies would be in even better shape. Meanwhile, the Australian economy has thus far managed to avoid recession altogether.
Though the lawyers joining Norton Rose from Deacons will largely be in Australia, Martyr says Asia is the main point of the deal. "We needed to have a much bigger body and base of practice," he says. "This gives us 700 lawyers on this side of the world."
One obstacle to combinations between Australian and U.K. or U.S. firms have been the differing economics, with profitability generally lower at the former. Martyr says the firms will not share profits immediately but will work toward the goal of integrating their finances. Norton Rose, which presently has 286 partners, will have around 400 after the combination.
The economies of resource-rich Australia and resource-hungry China have become increasingly intertwined in recent years. Martyr says Norton Rose's increased footprint in Asia will allow the firm to service emerging trade routes between China, Japan, Australia, and Southeast Asia far better than rival firms. The Australian firm's expertise in areas like mining and infrastructure will also dovetail well with the British firm's focus on banking and financial services, Martyr says.
For Deacons, the combination with Norton Rose will help it realize long-held goals of expanding in Asia. The Sydney and Melbourne firm known in the late 1980s as Sly & Weigall entered into 1990s alliances with both now-defunct San Francisco firm Graham & James and Deacons Hong Kong to help it expand outside of Australia. Though the two Deacons firm were separate firms, they operated a number of joint-venture offices throughout Asia.
Boyd says the association with Deacons was beneficial and the split was amicable but he also notes that joint ventures and alliances can only achieve limited integration of practices.
"We'll have a structure that moves together from day one," Boyd says of the combination with Norton Rose.Make a comment