The Arrival of The New BigLaw Name On The Block
The arrival on the legal scene of A&O Shearman, the merged firms of Allen & Overy and Shearman Sterling, will help reshape the legal landscape, but it will have a particularly significant effect upon the London legal scene.
The Magic Circle law firms that have for so long cast their long shadows over London’s City have more recently faced the aggressive onslaught of US-based legal giants who have increased competition, hired senior lawyers, boosted law firm associate pay and generally shaken the London establishment.
The merger between Allen & Overy and Wall Street’s Shearman & Sterling, forming a powerhouse boasting approximately 3,900 lawyers and a combined gross revenue of $3.5 billion, further underscores the evolving strategies pursued by these elite UK firms to maintain their standing and broaden their reach beyond the UK market.
The combined firm now has 48 offices in 29 countries and is headed by Abu Dhabi-based partner Khalid Garousha, (pictured) who was elected as senior partner and Paris-based Hervé Ekué who the firm has elected as managing partner of A&O Shearman..
Legacy firm A&O was part of the well-known magic circle firms – one of the five most prestigious London-headquartered law firms.
A&O had a strong brand in the United Kingdom, but despite its best efforts to expand into the United States, it lacked a reputation in that legal market. Shearman & Sterling, however, was a heavyweight US law firm, headquartered in New York.
A&O gains entry to the US market with the brand recognition brought by Shearman & Sterling, which in turn gains an expanded international network.
One of the issues for major UK firms has been that private equity deals emanating from the US are dominating the market, which requires the UK firms to step up their game in the US.
Roger Barron, formerly of Linklaters and now a senior advisor at Montresor Legal Recruitment, emphasized the significance of the US market for firms aspiring to global leadership.
“Either firms ambitiously pursue a leading global position or strategically focus on dominating the European landscape for major transactions, in which case, a substantial US presence is imperative,” he said.
Freshfields Bruckhaus Deringer, preceding the A&O merger, has pursued an assertive expansion into the US market.
With a workforce exceeding 400 lawyers across New York, Washington, D.C., and Silicon Valley, often making strategic lateral hires from competitor law firms, and the firm has achieved substantial revenue growth, securing a leading position among other Magic Circle firms.
Freshfields has expanded its private capital and transactional offering globally through its hires in leveraged finance, private funds, M&A and other sectors in the US, Europe and Asia – continuing its moves towards global growth.
Clifford Chance, on the other hand, recently inaugurated its third US office in Houston, with 10 partners, augmenting its existing presence in New York and Washington, D.C.
The firm remains a major global player, although as we reported recently, its partner pay had stagnated – but at a very handy £2 million each.
Clifford Chance’s expansion aligns with the firm’s focus on enhancing its global energy and infrastructure practice, building its practice in the energy market, but without detracting from its wide-ranging commercial and financial expertise.
Linklaters, while trailing behind its competitors in terms of US presence, made a significant stride by recruiting top talent, including George Casey, former global co-managing partner at Shearman & Sterling, to bolster its M&A practice in New York.
Despite these efforts, the firm acknowledges the steep competition inherent in growing an M&A practice in New York.
Slaughter & May is a smaller partnership but a highly profitable one and has rejected recruiting US lawyers and developed a ‘best friends’ relationship basis to expand its network, developing collaborations with major US firms such as Wachtell, Lipton, Rosen & Katz.
In the meantime, the global legal world is dealing with the emergence of the new global A&O Shearman, the trans-Atlantic law firm that has built a new legal footprint on the shifting sands of the legal landscape- a new entry in the LawFuel Prestige Law Firm List
