23 May Five mergers that changed the legal landscape
“May you live in interesting times”, as the saying goes. The 21st day in May 2023 proved to be one of the more interesting Sundays in the worlds of business and law.
The news was breaking that two legal powerhouses had come to an agreement. Partner calls were scheduled for that morning, explaining what was about to be reported in the Financial Times, The Lawyer and other outlets throughout the course of the day.
At 17.46 (UK), associates and the rest of the employees received firmwide emails about the developments: Allen & Overy and Shearman & Sterling are coming together in a transatlantic megamerger to create A&O Shearman, subject to a partner vote slated for September, according to sources close to the matter.
Whilst this is the first real test case for two firms of this size combining, it appears likely that it will ultimately come to fruition, with a filmed video statement featuring A&O senior partner Wim Dejonghe and Shearman & Sterling’s senior partner, Adam Hakki being released on the respective law firm and LinkedIn pages.
As further updates regarding the specifics of the union are released, we have compiled a list of five mergers that have left an indelible mark on the legal landscape:
#1 A&O SS (assuming that it comes off…), 2023
The move would create a firm with combined revenues of c.$3.4bn, and propel it to the fourth place in the Am Law 100 rankings – behind only DLA Piper ($3.68bn), Latham & Watkins ($5.3bn) and Kirkland & Ellis ($6.5bn).
This “consolidation” is the “new trend in the legal market”, as described by Wim Dejonghe in comments to The Lawyer. One of the obvious benefits that this merger presents Allen & Overy is an instant – and sturdy – Stateside foothold; and it will be interesting to see how the rest of the Magic Circle react. Does this mean that Clifford Chance, Freshfields and Linklaters will be seeking similar tie-ups so as to maintain and enhance service provision? What happens to the taxonomy of Allen & Overy? The new firm would no longer qualify for the Magic Circle and would shed the moniker, thus entering a new league of firm: the “global elite”.
#2 DLA Piper, 2005
One firm that is exceptionally familiar with the concept of merging and enhancing market footing is DLA Piper, the most notable of which was the merger between Baltimore-based Piper Rudnick and UK-based DLA LLP to form what was then the world’s third biggest law firm. The firm retains this position as of 2023, posting revenues of $3.68bn.
#3 Clifford Chance, 2000
Another Magic Circle firm makes the list: as the world entered a new century, Clifford Chance’s tripartite merger with Rogers & Wells (US) and Pünder, Volhard, Weber & Axster (Germany), resulted in one of the largest global law firms. The firm posted a gross revenue of $2.7bn in 2022, with over 570 partners and c.2,500 lawyers in total.
#4 Hogan Lovells, 2010
In 2010, Hogan Lovells was created through the merger of Washington-based Hogan & Hartson and Lovells of London. Described as the “transatlantic merger that set the standard for others to achieve,” by The Lawyer in 2021, the firm was also in the headlines last year when it was in discussions to merge with Shearman & Sterling. The firm’s 775 partners and 1,757 associates have helped to achieve a top ten ranking within the AM Law 100 revenue rankings since 2018.
#5 Mayer Brown, 2002
In 2002, London firm Rowe & Maw and US giant Mayer Brown & Platt merged to form what was then the tenth largest law firm in the world – Mayer Brown has 1748 attorneys and is ranked 12th in the United States according to the National Law Journal’s 2022 NLJ 500 ranking of firms based on size. On the 2022 Global 200 survey, Mayer Brown ranked as the 27th highest grossing law firm in the world.
So: what impact will this have on the market at large? Will firms seek to join in this consolidation, courting with would-be suitors until they find the perfect match – or will they wait and see what happens with A&O Shearman and any potential fallout that may arise? There may be a number of US firms of a similar size to Shearman who are looking over their shoulders – wondering whether the days of existing as a $1bn firm are coming to an end, given the economies of scale and the global coverage that the $2bn+ firms can enjoy.