REPLAY: Taylor Wessing and Winston & Strawn's transatlantic tie-up

Hello, the lawyer podcast is on holiday this week as we lounge about in the sun and gorge ourselves on chocolate. But with Taylor Whissing and Winston and Straun hoping to complete their merger and become Winston Taylor in three weeks time, we thought you might like to listen back to our episode from last year when news of the deal broke. Enjoy. Hello and welcome to this bonus episode of the lawyer podcast. Yes, we thought we had wrapped up the lawyer podcast for the year. But Taylor Whissing and Winston and Straun had other ideas. The lawyer exclusively broke the story of the second transatlantic merger in under a month on Friday. So we couldn't resist before we head off into the fest of sunset an emergency podcast on the news. And here on the podcast as always are the lawyer's litigation editor Christian Smith and me editor in chief at the lawyer Catherine Griffiths along with our deputy insight editor Nikhil Raj Agaval and international editor Charlie Johnston. And on this episode we have a very special guest, the founder of German legal magazine Yover, German legal market expert and quite conveniently the brother of our very own Catherine Allard Griffiths. Welcome all. And look to start off with because I think conscious that everyone listening might be very interested in transatlantic mergers but may not be as knowledgeable about Winston and Straun and perhaps even Taylor Whissing. So you're probably the best person just give us a brief vibe check on the two firms what they are, what they're known for, what they do. Very briefly Taylor Whissing tend to be called Anglo German but we'll go into that in a minute. Taylor Whissing is an upper mid market city firm big strengths in venture capital private equity tech life sciences IP private wealth bit of real estate as well. They have what's called a varine of a Ryan is a association under a large umbrella where partnerships come together under this umbrella and use that platform and share the brand and so on share services but they have they retain different profit pools completely. And that varine included the major part of it was the firm Vessing or now which is actually creates the Westing part of Taylor Westings name. And they're essentially a European based business with some Asian offices. I'm sure we'll get into that later in the podcast. Winston Straun Chicago headquartered national firm again sort of kind of upper mid market ish within the US very strong litigation decent corporate practice also very interesting and very well regarded IP practice as well. They do have a very small London and Paris presence had always struggled to grow so it was in that classic tier of US firms that couldn't quite get off the ground globally or on the transatlantic level. Just to add to what Kat was saying if you look at the data the firm Winston and Tron generates a revenue of more than a billion dollars Taylor Whissing the firm as a whole of a Ryan as a whole generates a revenue of about half a billion pounds but the UK part of it which generates the lion's shirt the revenue which is going to the US merger is about 284 million pounds and combined the firm will be about 2000 lawyers and will generate a revenue of about 1.6 billion dollars. Well look it would be easy to see this as the fourth major transatlantic merger in the past three years or so or less than even but there's a bit more to that in this case as well. I think actually before we come to the rationale behind it it's probably worth explaining what's going on in Germany. This makes it a more complicated merger than perhaps we've talked about recently with Asherson, Purgenskui and in particular a more controversial one as well, Elord. Well Taylor Whissing have been in a fine with each other for just under 25 years. The German practice is as Katzell is full service across five offices I think and then use that seemed to trickle into the German partnership in around September gave them a very hefty shock because they had reached the position where a lot of the German partners were saying that it's time for more integration with the rest of the fine. That was something that they had not been a huge proponent of over the last couple of decades. It was the only firm where the excuse was regularly wheeled out that there were tax reasons why they couldn't do a proper financial merger. But that seemed to have now passed and they were pressing for full integration and now such the announcement of the UK partnership that they were seeking a merger with the US firm was quite a shock. What's going to happen now is what's often happened to German law firms who either fail to get a merger or have been rejected by a different suitor is that already recruitment consultants are obviously phoning a lot of partners at Taylor Whissing. But what's possibly more interesting is that what's come out of the German partnership over the last few weeks has been to really good reporting by Martin Schubert at Eurow on this is that they've set up a cooperation agreement with Taylor Whissing UK so that referral and client relationships can continue as before. But they've at least seen to have made the internal announcement that they're going to stay independent. Now whether that is in the long term possible is the big question because Taylor Whissing I think most observers would say is a firm that has suffered from under management over the last 10 to 15 years. Riverview Palloyer has stagnated over the last five which isn't a great metric but they do have a new managing partner in Oliver Bertram and one of the most interesting things is the degree to which the German partnership is now standing behind Bertram which is the first time in a long time that the very heterogeneous partnership which is Taylor Whissing has been strategically united to this extent. So that's a positive sign but I think most observers will say the firm is going to car under a lot of pressure. It needs to undergo some equity management fairly quickly and there will be all sorts of other firms circling. The strengths of the German partnership are not dissimilar to those of the UK's are very good IP and when the leading IT practices and the excellent venture capital practice as well and they are attracted for many firms as well. And can I ask why have they split as a result of this or proceeding this? Why can't they all do? I mean A&O Sherman for example has German offices and they all merge together. Why can't Taylor Whissing keep its German offices? I'm sure Capca say something to this I think from the figures as well. The German offices aren't as profitable. I think there would have been a drag on the profitability of the firm as a whole. But I think more to the point the German like many German firms they are transatlantic business is not so much related to private capital. It's more related to industrial clients and IT clients. And they have referral relationships to a whole bunch of US firms. And I think the feeling on the German side is that the way I understood it is what they are there, skepticism about what the UK firm is doing is that the merge firm won't be big enough in Europe to and Winston Straun isn't big enough in the US to make up for those the loss of those referral relationships. There are some major technology corporations who use Taylor Whissing in Germany and I think there's a real fear that any tie up with Winston Straun, we threaten that but I don't think there's really any interest at all in a US tie up. Yeah, I mean Taylor Whissing UK, I mean their partners are acutely aware that they are precisely in the sort of fields that US firms will come accoling. We've seen what's been happening with Travis Smith over the last few years. Taylor Whissing at the moment has a relatively sticky kind of partnership in London but you know, the fact is that the US firms are still paying big money for really good teams and Taylor Whissing would have come into that category. I mean Taylor Whissing has understood the importance of a US arm to its practice for years. You know, it's got a California operation. It doesn't practice local law but it has six partners out there. Actually two of them are from the UK partnership and the rest are actually from other parts of the Orion but it's been a really important plank of their practice and I think that you can't be in tech and in life sciences and venture capital, you know, growth company markets in London without actually having a proper US strategy. I think for the UK partners, the Lodgis. is obvious. I think Al is absolutely right. For Joan Partners, it's a much more distant prospect, and I don't think it's much less existential. But of course, by not accepting that premise, it means they now have existential issues for themselves. Well, we'll come back to Europe as well in a moment, but just kept sticking with you and Nikhil as well, I think. I mean, just talk us through it. You started on it there, kept the rationale behind this merger, why does Taylor-Wissing want it, and also why does Winston-in-Straun want it? Well, I think if you look at all the mergers that have happened in the past two, three years, Christian, they're very clear why the firms want these mergers. The mid-tier firms are seeing the problems or the limitations of their model. UK firms clearly want US presence. US mid-tier firms want a global platform that the UK firms tend to provide them. But by that logic, it's vexed as to why they wanted a merger. In that respect, I think it serves that purpose. I think for firms outside New York, there are plenty of really good firms that have got Chicago or Boston or a lot of the Midwest. I think a lot of UK lawyers don't really understand actually how important the Midwest economy is. Actually, I suspect that the Germans don't either on that basis as well because there are a lot of industrial and there are a lot of potential strategic buyers, not just financial buyers. Quite often, those firms that have got a big business and actually huge in disputes as well, they are quite attractive culturally to a UK firm because they don't make quite the same level of profit per equity partner. There isn't quite the same expectation to be clear. There will be a higher expectation for Taylor-Wessing UK to come up to scratch in terms of those metrics. But they do present a rounded alternative that is perhaps less for Russia, shall we say, culturally than quite a lot of the big New York firms. And speaking of this sort of litigation focus as well, let me ask you, a pop quiz, who was the fastest growing litigation practice in the UK last year? Why? I don't know, Christian, who was the fastest growing litigation practice in the UK last year? All right, you know how I feel about Pantos. It was Taylor-Wessing. They were the fastest. Well, actually, well, that's not entirely true. The second fastest by half a percent or something like that, but only because, what in part, because, you know, Sherman was the fastest growing practice, but that was their first year post-Murderer and they would have had a little bit of merger growth out of that. So the fastest organic growing litigation practice. And Taylor-Wessing has been, you know, focusing on that quite a lot recently, both in the UK and more globally, very much in the life science and technology areas as well, but more commercially too, and also like Ashes, who is merging with the litigation heavy Perkins Kui. Ashes has also been putting its foot down in litigation in recent years. So there's a bit of a, bit of a, a link there, I suppose. Yeah, I think this reminds us, doesn't it, that, you know, life isn't all about the top private equity, private capital deals. You know, there is plenty of other work to be had on a transatlantic level. Can we bring in Charlie? Charlie, you've been looking at what this deal might mean for other parts of the sort of the Taylor-Wessing sphere, if you like. And I think you've been following actually what was going on with their Spanish link up. Yep, absolutely. So I think what we're seeing with Taylor-Wessing's strategy for international expansion, and we've been seeing this for a little while now, is that there's a growing kind of sense and recognition of this as a further example of a pattern of yes international expansion and tie-ups, but through methods that are outside of that for our model that we mentioned. We saw that in Italy just earlier this year through a strategic alliance with domestic talian firm, Orzinger or two, and we saw that a couple years ago as well with a similar agreement with Iberian firm, Asiha. So this merger is another geographic expansion that continues that trend and diverts away from that varian structure, and at the same time, it also signals somewhat of a move away from Asia, which is super interesting to consider especially in the context of the Ashes US merger, it announced just last month as well. I think it really shows the kind of different pathways that they're embarking upon. Taylor-Wessing itself has been actively reducing or perhaps they might say reorganising their Asian presence in October. It's split from its Hong Kong arm, HM Chen and Co. So that ended in association that has been going for about 10 years now, and alongside that it's been refocusing, should we say, its China strategy around Shanghai. So when you take that in the context of Atast, who at the same time are pursuing the US merger, but are continuing to prioritise their Asia-Pacific presence, they've got offices across Hong Kong, Singapore, Tokyo, Shanghai, Beijing, etc. So I think that's really interesting to consider. And coming back to Europe for a second, we know that this merger will have structural consequences in particular, not only Germany, except split, but also so all Eastern Europe. And what that means in practice is that whilst the firm is expanding into the US, they're creating space elsewhere for firms who may want to enter those markets and leaving behind very well-established pools of talent for them. I think that's such a good point and I think it is going to present so many opportunities for firms that want to expand further into the content. I mean, Al, you've already talked about the fact that recruiters are already calling in Germany. We haven't talked much about France, but that will happen as well. And Eastern Europe has been increasingly interesting. I mean, when we say Eastern Europe, we really mean Poland here. That has become increasingly interesting to an awful lot of firms. We saw Adolf Shaw's take the link later's Warsaw office. There are persistent questions raised over what A&O and Ashurman are going to do with their Warsaw offices, although obviously the firm itself says that they are committed to Warsaw at all times. But there is a sort of wholesale restructure and I think that will happen across the continent because of these moves. To your point, Charlie, the Winston Taylor, which is what we're going to have to learn to call them. And by the way, I can't remember which way that name works. I keep calling it Taylor Winston. So if I at some point in this podcast, I say Taylor Winston apologies. But anyway, Winston Taylor is the firm. Anyway, not all transatlantic mergers can be grouped together. I mean, we are currently grouping Ashur's together with Winston Taylor because they happen within a month of each other. But as Charlie points out, it is a completely different fish. You know, Winston Taylor is not interested in Asia. They've said that really clear. Obviously they are. They're going to have to want to fulfill certain amounts and mandates for their clients. But that is not a priority area of growth. Whereas Ashur's it is. And obviously the other thing is that the sectors, very notable to see how Middle East is very important to Winston Taylor strategy in a way that you didn't really hear so much from the Ashur's management when they did the deal. And the reason the Middle East is important is because Taylor Westing, as was, has a really, really strong private wealth practice. And that is going to power quite a lot of the move into private capital, private equity and investment work into the US as well. And Charlie, can we just clarify? So, so Poland and Germany are separating. But then Spain and the Netherlands and other parts of the European practice are staying with the London office. So yes, so Spain, their alliance with the Seahill will remain in place. That's been confirmed. The likes of the Netherlands, Belgium, Ireland, they will also remain with Winston Taylor. It's just France, Germany and Eastern Europe that went. And I suppose I mean, and someone's linked to what Alad was saying before about the less the lower profitability in Germany. I mean, that's nickel. That's also going to be an issue with the current Taylor Westing in Winston and Strong in the sense that they're going to lot lessen London on the whole, don't they? Yes. I mean, in my eyes, I see this as an acquisition. I mean, if we were, if we were calling A&O Sherman, an acquisition of Sherman and Sterling, then this is exactly that. This is an acquisition because Taylor Westing is, is, is, is the Taylor bit of it is clearly the tiny apart. And that there's going to be an increased set of expectations from that bit, as Kat mentioned earlier, that if you talked to any lawyer today, Taylor Westing, they've, you know, they've got a great work life balance. They've got a 1,600 hour target. They rarely work weekends, but that's not the case for Winston and Strong. The set of expectations for Taylor for Taylor Westing lawyers in the UK is going to either grow or they're going to follow a multi-taer system when it comes to expectations and compensation eventually. I, I suspect that the UK Taylor Westing partners will bulk Nikhil at your characterization of them not working at weekends, but they might, they might, but they will not see that when they talk about culture. Also true. I think what this also shows is the inability of the, the sort of the upper mid, if you like, the national US firms is that they are now absolutely accepting that they can't get a transatlantic platform at all on their own. They can't build it themselves. They have to do the deal. And Nikhil, I know this is a point that you've made repeatedly as well. And, and, and it is, therefore, the issue what is going to happen next because if I was running a national firm such as let's say Pillsbury or Ulster and Bird or those are two random names by the way or Shepherd Mullin or one of those kind of firms that have quite often been thrown into the mix as potentially interested in coming to Europe, you've got a decreasing pool of candidates that can actually deliver what you want for the clients. No absolutely and even if you look at Winston-in-Stron, they paddled with a few important lateral hires last year in London. They hired a partner seagull from Decert. They made a decent enough round of promotions in London as well but again none of that was enough to give them the kind of scale that they wanted out of London and despite the fact that Germany is leaving the is decoupling from the from the Varian. Winston-in-Stron saw value in the deal and they decided to stick with it simply because of how far up the priority list London is for them and just to put that into context what this acquisition does for them is that when they were barely in the US 50 with the revenue of $44 million earlier this year, this will overnight take them into the top 10 and they'll be a $320 million firm in London which puts them right next to Mulebank. That is quite something. Can we come back to Germany here and also I'd like now to advance and trademark my term "toexit". So, Allad, you've talked about the likelihood of the vesting part of Taylor-Wessing becoming under attack from headhunters and from opportunistic firms. What are the dual practices? What if you were looking to expand what would you do? Number one and secondly, talk us through the mood within the vesting part of the firm at the moment and the mandate that Oliver Butler actually must have. The strong practices are healthcare, IP, IT and venture capital and they really are top flight practices. Bertrand was, he's someone with some management experience about the firm. It's not a couple of other management jobs and the fact that he was voted in about a year and a half ago shows that the Taylor-Wessing partnership were ready for a different approach. Now, you can say it's a few years too late but what he does have in his management team and by all reports the atmosphere in the, if we call it the vesting partnership, although they insist they're keeping the name, I think, is fairly bullish. They think that they are, there will be in a position to restructure the firm and there is some possibly significant restructuring that would, from an outsider's point of view, it would have to take place. But the big question is what happens in a year or two? If the problem with the fine structure has been a lack of integration and not getting a fair share of cross-border work, then being an independent firm and only started to be a completely independent firm in 2025 is not really going to solve that. And so that's why a lot of people were already speculating about the German partnership looking for another merger partner in the UK. Although I imagine now that the fine philosophy is coming under a lot of pressure. I mean, we've seen the example of it at Taylor Wessing and the financial results of CMS and multiple clarts and name two others are not, haven't been exactly stellar over the past five years. I think there's a lot of justified speculation. Well, if they were going to have to restructure and then look for a merger partner in the UK, why didn't they do that before? Yeah, and do it with Taylor Wessing UK. Within, if you are an independent firm in Germany right now, you've got obviously at the top, you have Hengeler, you have Glyse, you have Nure, another independent firm like Lutter, to your point, Alid. Correct me if I'm wrong, but Lutter went into sort of a slightly odd alliance with a couple of other European firms and has slightly lost ground is my feeling. You know, to be an independent firm in Germany has its own massive risks, doesn't it? Yes and no. I think one thing that looks very different from Germany is, if you're sitting on the biggest economy in Europe, then if you're a firm that has up to 300, 400 lawyers, then the existential need for an international alliance is possibly not as obvious as in some other countries. And Lutter actually is a good example. They have indeed had a whole load of different alliance partners over the years, but they actually one of the good performers according to the financial data over the last five years. And they've done that mostly from a domestic practice. So I think just in the same way, there'll be some US firms who would never dream of doing an international tie up. In Germany, the economy is big enough for a medium sized firm to get along actually very well without it. It's a question, however, of what is it the partners want? And are they happy being in a purely domestic firm? And firms like Hengler and Lyes and Nürhe, you mentioned, Kat are highly international. They do tons of cross-border work on their own, but also with allied UK and US firms. And it leaves UK firms, many of whom, have been certainly inquiring about mergers across the other side of the Atlantic with one fewer merger partner, but to potentially merge with basically. I mean, Kat, do you think that the pressure in 2026 now will certainly be on these firms to get a move on? I'm really looking forward to hearing from firms such as Simmons and Simmons and Stemson-Harvard and Phil Fisher and Adelshaws. These are firms that have very much set out their store as becoming very much European focus that don't want to go down that US merger route, that don't want to disrupt their supply lines of referrals at the moment. I think the Taylor-Wessing deal will make them think again. I mean, not necessarily change their direction, but will probably make them reexamine their strategy and see how long that is going to be viable for. There is so much of running law firms is about luck and about timing. And I think to a large extent, what looks like a great strategy now can suddenly turn very, very sour. I mean, let's not forget, Taylor-Wessing has been a prisoner of this very, I mean, structure for years and years and years. And I have to say that most of us thought that they were stuck with it, much as in the way that Osborne Clarks kind of stuck with it, or CMS, or Norton Rose, or what have you. So I think this, Taylor-Wessing cutting the Gordian knot should probably embolden quite a number of managing parts and say, well, actually, you can control your own destiny or not necessarily stuck with what's been bequeathed. But equally, you still have to find the right US partner for it to really work. So I think they're in a kind of holding pattern at the moment. All right, then, we'll look, we do this for the Ayrshire's Perkins-Kooey podcast, and let's do the same here. I want to hear if it's a good merger or a bad merger. It's a good acquisition for Winston Strong and for Taylor-Wessing Germany. It is possibly the beginning of an exciting new time, where it gives them the chance to reshape the firm the way they, some people have wanted to do so from the last five years. Could it also be the beginning of the end for Taylor-Wessing Germany? With theoretically, yes. But they do have, the fate is in their hands. It's up to them whether they want to follow the line that Oliver Betham is pushing. I'm going to double down on what Alit said, which is that it is a great acquisition for Winston Strong. Having said that, I feel like this will pose more explicit challenges as far as integration is concerned than some of the other ones than some of the other recent mergers have. Yeah, I think it might be difficult to speak to an entire pan-European perspective on whether this will be good for them, but I do think one area in which it will be good is specifically for ASEHA and for those referral relationships. I say that because of, specifically because of Winston and Strong bringing the Miami office to this acquisition and the referrals that could come from that. Yeah, I think it's, I'm not sure yet, I'm sorry, I'm going to sit on the fence. I don't know. I want to find out more and I think cutting off the most successful or one of the most successful parts of the firm being Germany and maybe not in terms of money, but in terms of actual reputation and performance and quality is [BLANK_AUDIO] interesting one, particularly at a time when Taylor Wissing is doing so well in areas like IP and the UPC. It's a bold decision. Yeah, my take is definitely bold and I think bold can offer to be a euphemism for insane, but I don't think it's insane. I think it's imaginative. I think it's it frees up the thinking for a lot of management in this particular in this particular sector of the market because what they've done is kind of the unthinkable and now we're already used to it that the varinas being split up and so on. It presents a solution potentially for those UK firms such as Travis Smith to follow suit that you can be potentially absorbed into a greater whole of the US and for it not to scare the horses necessarily. Well, we'll see with the partnership vote, right? But I suspect the partners will will go along with this and it creates opportunities as a pure transatlantic play. Taylor Wissing could have carried on like this forever and never found any kind of US merger partner whatsoever. But you know if you're not integrated with the German firm, you know, presumably you're still getting the benefits if you've got a cooperation or a referral agreement. You're still going to get that client service. You're still going to preserve the personal relationships that may have built up over the years. So, you know, I think it's almost it was an unimaginable act and now it's truly imaginable and allows other managing partners to also imagine things big. I do think that they're a huge risk. So I agree absolutely with with all of you saying that but I think that this simply underlines the importance of the transatlantic corridor and you know that is a logic that is not going away. Well, less of an unequivocal vote of support for this merger than the Ashes Perkins-Kuwi one. And I'm really I really hope that we don't have to do another emergency process before the end of the year. So if please law firms out there stop merging that would be rather helpful so we can get some holiday. You're no more merging I think till the third week of January would be good. That would be very very good. Twexit, who knows what will follow from Twexit many perhaps unintended consequences. We'll leave this episode there. Thank you very much for tuning up. You can find out more about this and other news on the lawyer.com and until the new year it really is we think goodbye from us. Goodbye. Goodbye. [MUSIC]