Magic circle firm Allen & Overy (A&O) announced a merger with renowned US practice Shearman & Sterling yesterday to create a combined business with revenue of $3.4bn (£2.7bn).
Called A&O Shearman – short for Allen Overy Shearman Sterling – it sought to differentiate itself from other global tie-ups by saying it created “the only global firm with US law, English law and local law capabilities in equal measure”.
Subject to approval by the respective partnerships, together they will have around 800 partners and 3,900 lawyers across 49 offices in 29 countries.
A&O is very much the senior partner in the merger. Its 2021-22 results recorded revenue up by 10% to nearly £2bn ($2.4bn), with US income of £252m. It had nearly 600 partners and 2,800 lawyers and other fee-earners.
The merged firm will have $1bn of US revenue, with 210 partners and 720 lawyers.
In a joint statement, the firms said the merger was “driven by clients’ needs for a seamless global offering of the highest quality and depth to support them in navigating an increasingly complex legal, regulatory, and geopolitical environment”.
While Shearman would “gain access to a dramatically expanded ‘rest of the world’ offering across practice areas”, A&O would benefit from “increased board-level recognition and expanded access to a corporate client base in the US”.
They added: “The combined firm will be perfectly positioned to capitalize on global macro trends including energy transition, technology and private capital”.
A&O senior partner Wim Dejonghe said: “We have listened to our clients and their requests for the highest-quality advice to help navigate the demands they face, and to do so in an integrated and globally consistent way.
“We, A&O Shearman, will do this by accelerating our ability to bring the best of both firms, regardless of geography.”
Adam Hakki, his counterpart at Shearman & Sterling, said: “We’ve always admired Allen & Overy and thought of it as a kindred spirit of our firm in terms of culture, clients and strategy…
“Client need for global elite firms has never been greater. They are calling for integrated global legal solutions and advice: merging with Allen & Overy will dramatically accelerate our ability to meet their needs in an increasingly complex environment.”
He added: “I can’t think of a firm that would be equally elite around the world.”
The firms said a preliminary assessment of conflicts indicated there would not be a “significant” number of issues.