The firm which used to be known as SJ Berwin took a large step closer to oblivion today after partners decided not to put their hands in their pockets to save it.
King & Wood Malleson's European and Middle East offices (which made up SJB before it merged with KWM in 2013) have been in crisis for months. Insiders say more than 50 partners have fled over the last year and the firm's debt stands at around £35m.
Partners were called in to an emergency meeting two weeks ago where they were informed of the gravity of the situation. A few days later, the firm's European Managing and Senior Partners flew to China to beg for help. They got it, with a couple of conditions. Partners were told that their Far Eastern board would bail them out - as long as they stumped up £14 million between them and agreed to be locked in to the firm for 12 months. At least 70 of the firm's 120 partners in Europe and the Middle East had to agree to the deal for it to be viable. They were given until this week to decide whether to share or to shaft.
SJB partners had a reputation for being hard-nosed corporate bastards, and it looks like it may have been well-deserved. A spokeswoman confirmed today that the vote is in - and it is shaft, with too many partners opting to cut their losses and get out.
|"To share, or to shaft? You've made your bets!"|
She said KWM EUME, "has not been able to complete its planned recapitalisation programme", because, "regrettably, insufficient value of new capital was committed".
The situation is now so dire that management has publicly acknowledged that it is looking for a merger (read: takeover) to survive. Even that would be something. This is a horrible way for its staff to see in Christmas. Nevertheless, KWM's spokeswoman said they would "continue to service the needs of clients, operating on a business as usual approach". Doubtless staff will do their best. But unless lawyers (and non-fee-earners) normally work while staring down the barrel of unemployment, circulating their CVs and trying to identify which partners screwed them over, business as usual is going to be difficult.
Read more on Friday.