Arthur Andersen vowed this week to carry on searching for a major law firm despite its embarrassing failure to merge with City solicitor Wilde Sapte.
Andersens pulled out of the deal after the law firm failed to hold on to some of its senior partners in London and Paris. Accountancy Age understands a due diligence exercise indicated the firm’s practice in areas outside banking and insurance was weaker than first expected.
Nick Prentice, Andersens’ head of tax and legal affairs in Europe, said: ‘I would like to make clear this is not a change in strategy – it’s just a short-term disappointment.’
Andersens spent over a year trying to find a City-based legal firm to merge with its Garrett’s practice, which concentrates on tax and corporate finance.
Prentice said: ‘Our objective to form a merged firm of the highest quality by allying these strengths to those of our own legal network depended on the original elements of the transaction being preserved intact.’
Andersens’ decision fuelled rumours Price Waterhouse was ready to step into the breach and offer Wilde Sapte a face-saving deal. PW denied it was in talks. Observers added PW would find it hard to push through the deal against the wishes of Coopers & Lybrand – its prospective merger partner.
Wilde Sapte partners are understood to be bitter at Andersens’ decision.
Mark Andrews, the firm’s senior partner, wrote a memo in which he claimed Andersens ‘did not understand the nature or internal dynamics of our business’.
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