Sources have told RollOnFriday that Irwin Mitchell is in talks to merge with Thomas Eggar.
However, while equity partners at Irwin Mitchell have known about the proposed tie-up for at least three weeks, the firm's staff have been kept in the dark.
The two firms are very different. While London-based Thomas Eggar employs just under 300 fee-earners and 480 staff overall, Sheffield firm Irwin Mitchell is four times the size, with over 1,000 fee-earners and around 2,000 staff. Similarly, IM's profits per equity partner of £600k dwarf TE's figure of £259k.
Irwin Mitchell has been making the news for some embarrassing slip-ups recently. First, it managed to get itself banned from Google after its digital marketing strategy backfired and appeared to the search engine as out-of-control spamming. Then this year it pissed off its support staff by outsourcing their jobs. And inevitably if the merger goes ahead, further efficiencies beckon.
Thomas Eggar refused to comment on the deal, saying that it had “a clear growth strategy" which, "includes the potential for mergers or acquisitions". Irwin Mitchell declined to comment. So, neither denied it and so its true.
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The two firms are very different. While London-based Thomas Eggar employs just under 300 fee-earners and 480 staff overall, Sheffield firm Irwin Mitchell is four times the size, with over 1,000 fee-earners and around 2,000 staff. Similarly, IM's profits per equity partner of £600k dwarf TE's figure of £259k.
Irwin Mitchell has been making the news for some embarrassing slip-ups recently. First, it managed to get itself banned from Google after its digital marketing strategy backfired and appeared to the search engine as out-of-control spamming. Then this year it pissed off its support staff by outsourcing their jobs. And inevitably if the merger goes ahead, further efficiencies beckon.
Thomas Eggar refused to comment on the deal, saying that it had “a clear growth strategy" which, "includes the potential for mergers or acquisitions". Irwin Mitchell declined to comment. So, neither denied it and so its true.
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There is also a credibility issue around its management with those previously engaged in merger talks with IM being less than complimentary about the gravitas of those conducting the negotiations. Those same personalities make it difficult for IM to recruit and judging by 20 partners or so leaving every year, they can't retain those who have been at the firm for some time.
TE might merge with IM but the immediate culture clash will see its quality lawyers heading for the exit putting IM back into the position it is now. An unbalanced business with too much reliance on pi.
What external investor is going to miss the obvious poor leadership team, high number of partner exits, market threats which IM has failed to respond to and the obvious failure of delivering improving margins through exploiting economies of scale.
This is doomed, TE partners need to wake up and look elsewhere. Alternatively they could join IM and sink with it whilst competitors pick off clients and TE partners.