When you introduce your new pal Shearman to the gang.
Shearman & Sterling is merging with Allen & Overy, as long as the partners vote it through. Which they better had, as the firms have presented it as a done deal.
The combination will create the “only global firm with U.S. law, English law and local law capabilities in equal measure, and the world’s third largest integrated law firm”, said Shearman and A&O.
A&O brings around 5,800 people to the table, including 590 partners and 2,500 lawyers, while Shearman is considerably smaller, with 850 lawyers and approximately 200 partners.
Their merged beast of a firm would comprise around 3,900 lawyers across more than 49 offices, with approximately $3.4 billion in revenues.
The benefit for Shearman & Sterling, which has its headquarters in New York, is gaining access to a “dramatically expanded ‘rest of the world’ offering across practice areas”, while the Magic Circle firm would receive “increased board-level recognition and expanded access to a corporate client base in the U.S.”, said the firms in a statement.
Other motives are available. The number of lawyers which Shearman has haemorrhaged following its failed merger talks with Hogan Lovells - a five partner team defected from Shearman to Ashurst just this week - has suggested to some that the needle on its merger dial is pointing closer to 'must-have' than 'nice-to-have'.
If the merger does complete, an awkward reunion beckons for M&A partner Guillaume Isautier, who abandoned Shearman in March for... A&O.
The Magic Circle firm has long sought a significant US platform to complement its outposts in New York, Boston, Silicon Valley, San Francisco and Washington D.C.. It suffered a setback in 2019 when merger plans with O'Melveny & Myers flopped after 18 months of talks.
A leading figure in the sector told RollOnFriday that snagging Shearman would satisfy Allen & Overy’s ambition to obtain a high-grade US presence, but that staff at both firms would have questions around the security of their roles given the opportunity for ‘synergies’ which such a merger would present.
“A&O have been looking at US merger for at least 10 years”, said the source, but the key for the merger’s architects “will be who stays at both firms and how quickly they can eliminate overlapping people. It’s two big, historically bank-led businesses, which isn’t the direction of travel - so how they can turn that around will be interesting to watch”.
Shearman is indisputably the weaker partner, said the source, and while the relative profitability of the two firms meant a merger arguably made sense, “S&S have lost a lot of good people”.
Although the merger is still subject to a vote which, at A&O, will require 75% of the partnership to get onboard, it has been presented to the world as a sure thing. Indicating how confident they are that they have the numbers, the leadership teams have staked their credibility on the merger occurring by unveiling the name(s) of the firm and its logo.*
That element required careful thought. Plump for 'A&O SS' and the Magic Circle firm sounds like it’s become a division of the Wehrmacht. But opt for 'Allen & Overy & Shearman & Sterling', and there won’t be any ampersands left for anyone else.
The firms have hit upon an unusual compromise – two names. There’s ‘Allen Overy Shearman Sterling’, which no-one will use, and “A&O Shearman for short”.
Wim Dejonghe, Senior Partner at Allen & Overy, said, “This combination of two great firms is such an exciting step for us. Both firms have a history of excellence, and together we think A&O Shearman will be a firm unlike any other in the world. 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”.
Praising Shearman & Sterling as “an incredible group of legal minds; a firm built on integrity and excellence, founded like us in a premier global financial capital and with an extraordinary group of longstanding clients”, he said that “What excites me about this merger is the complementary cultures of our two firms. We have striking similarities across the board, and I believe we are going to be wonderful partners to one another on this journey”.
If it comes off, A&O will succeed where plenty of other UK firms have failed. Ashurst aborted attempts to hook up with Sidley Austin, Fried Frank, and Latham & Watkins (not all at once), before finding love with Australian firm Blake Dawson, while Freshfields and Debevoise wooed each other many moons ago, only for things to go cold.
UK firms which have pulled off transatlantic couplings include Lovells with Hogan & Hartson (in a sweeter parallel universe its nickname is LoveHart not Hoglove), Norton Rose Fulbright with Chadbourne & Parke, Eversheds with Sutherland Asbill & Brennan, DLA with Piper Rudnick, BLP with Bryan Cave, and Bond Dickinson with Womble Carlyle.
A merger in which the UK business occupies the driving seat may appeal to A&O's partnership more than a tie-up in which a bunch of eat-what-you-kill US partners are dominant, which usually ends with a bloodbath as Blake ('Billy') T Crebshaw Jr III and his pals jettison any partner who's been billing under 5,000 hours or taking more than one week off a year.
Adam Hakki, Senior Partner at Shearman & Sterling, said “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”.
“This is truly a game-changing moment for both firms”, he said, trying not to bite A&O’s hand off too obviously, selling it internally as “a fantastic opportunity for our people to be part of a transformative transaction and an institution of such significance, and we look forward to recruiting even more stellar talent [translation: not losing any more] in the coming years”.
*Saatchi even got involved.
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Sad they didn't go with Shearman & Overy
You nailed the kids.
I mean, in the picture. To the firms. Not literally obviously, nailing kids isn't cool; you know what I mean.
Rumour has it that Shearman was on the ropes and that this was a rescue deal.
Also can we stop pretending that Womble Bond Dickinson is a US firm? They have separate accounts.
"If the merger does complete, an awkward reunion beckons for M&A partner Guillaume Isautier, who abandoned Shearman in March for... A&O."
Megalols at this - can you imagine what his first partners meeting was like?
"Alright lads, agenda item number 3, progress on the merger with Shearmans..."
His face must have been an absolute picture.
Allen & Overy & Shearman & Sterling - AOSS, is ASS with a hole in it.
....which usually ends with a bloodbath as Blake ('Billy') T Crebshaw Jr III and his pals jettison any partner who's been billing under 5,000 hours or taking more than one week off a year.
This was spot on and hilarious.
There will be more company mergers using AI Robot lawyers.
Surely the most striking brand option would've been Allen Shearer?
Looks like a sh*t show with A&Os new finance director leaving after 6 months?
I think 'A&O Shearlings' would give it a nice countryside-in-the-city kind of vibe.
I can provide some insight into the naming process
@jamie trying to push his unfunny article at 11:19
While A&O Shearman may be the official name resulting from the 'merger' (which is really a takeover), it's likely that everyone will continue to refer to it simply as 'A&O.' This temporary naming arrangement brings to mind a depressing comparison to my personal life. When it comes to my marriage, my wife didn't take my name. I handle the cooking, the dishes, and taking out the trash. In many ways, I feel like a puppet rather than an equal partner. My friends seem to have disappeared, or they've become our mutual friends, leaning more towards her side. I sometimes find myself feeling like a third wheel.
Exiting this situation isn't as simple as it seems. I once consulted a divorce lawyer, who warned me that I would likely end up with nothing while my wife would gain everything. So, for now, I'll continue to exist in the background until she grows tired of me and, in a completely non-threatening and metaphorical way, decides to 'poison' my presence and relegate my remains to the metaphorical 'floorboards.'
In the context of the law firm name change, this is of course merely an analogy where the official name may differ, but people's habits and familiarity will likely persist, and they will still refer to it as 'A&O.' Perhaps it's just a matter of time before the official name catches up with what everyone already knows and uses.
A&O catching a falling knife.
Two drunks groping around for an anchor in the dark.
Does this make them the world's first "Magic Shoe" firm?
Sorry to hear your predicament, Paul.
@Paul - does she at least let you listen from the hallway when her boyfriend comes over?
Or are you a wardrobe guy?
Dang it Paul, I feel for you man.
Happy is invaluable. Lost money can be remade. Life is short - don’t waste it with someone you don’t love.
Paul, you'd be broke if it wasn't for her.
Don't worry Paul. We've decided to keep you chained up in the shed at least until your parents die. Then we can use your inheritance money to put our kids through university.
Glass half full eh?