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The merger plans of Marsh & McLennan Cos. Inc. and Johnson & Higgins have dealt a devastating blow to the UNISON network and its members.

Not only will the international brokerage network lose its largest partner, but risk managers also may withdraw business from network members due to the loss of J&H's support.

At a meeting of several UNISON member firms in New York last week, broker executives sought to pick up the pieces of a potentially doomed network.

For the remainder of 1997, at least, UNISON will continue to operate as usual, said Christian Dahms, a managing partner of Hamburg, Germany-based Jauch & Huebener KGaA. What members will do after that is "fully open," he said.

Some clients, however, say the nine-month reprieve is not reassuring.

"Without Johnson & Higgins, Jauch & Huebener loses 40% to 50% of its power," says Klaus-Wolfgang Schulze-Weslarn, risk manager and head of insurance at German consumer products manufacturer Henkel KGaA in Dusseldorf.

Mr. Schulze-Weslarn fears UNISON's demise could make it harder for buyers like Henkel to obtain coverage.

The competitive outlook for domestic brokers without the resources of an international network are not good, Mr. Schulze-Weslarn said.

"Jauch & Huebener must look for alternatives, and that will be difficult, expensive and take a long time. We'll have to see how they react and what we will do then," he said.

However, Mr. Dahms insists Jauch & Huebener has alternatives, and a final decision about UNISON'S future will be made by May, though the network will continue business through at least the end of the year.

Among the options are continued cooperation among remaining members or finding a new partner to join UNISON.

However, Mr. Dahms made it clear that any cooperation with Johnson & Higgins or anyone else would have to apply in all countries, including Germany.

Part of Jauch & Huebener's dilemma is that a portion of its business is derived from providing services to Johnson & Higgins' international clients in Germany. Marsh & McLennan, however, owns Jauch & Huebener's major German rival, Gradmann & Holler GmbH.

Gradmann & Holler has 800 employees and gross revenues of about 210 million DM ($146.2 million) compared with Jauch & Huebener's 1995 gross revenues of 310 million DM ($215.8 million).

Also, a number of international projects that Jauch & Huebener and Johnson & Higgins co-finance and maintain are in jeopardy. The two brokers participate in an international information network; a 50/50 venture in Amsterdam, Netherlands, set up to invest in other UNISON partners; ownership of Jauch & Huebener Reinsurance Brokers Ltd. in London; an office in Moscow; and UNISON S.A. of Brussels, Belgium.

Mr. Dahms insists all of those operations can be quickly changed to reflect a new UNISON structure.