A&O Shearman

OASS it isn't. A&O Shearman it is.


Partners at Allen & Overy and Shearman & Sterling have voted for the two firms to merge.

The new firm will officially be called ‘Allen Overy Shearman Sterling’, which no-one will use as it's a mouthful, and the shortened 'A&O Shearman' is already the go-to name. 

The merger, set to be complete by May 2024, will make the transatlantic beast the world's third largest integrated law firm, with around 3,950 lawyers and 800 partners across 48 offices and combined revenues of approximately $3.5 billion.

The deal follows months of discussions, but was finally approved with a resounding 99% of the votes cast at each firm giving it the thumbs up.

A source told RollOnFriday that one of the issues pored over concerned Shearman having "significant pension liabilities attached to partners in the US, who enjoyed gold-plated pensions”.

Over the summer, in order to get the merger over the line, Shearman was in negotiations with some of its ex-partners to reduce what they would receive under the pension scheme.

The two firms had to agree on the size of the pension liability that the combined firm would take on from Shearman’s unfunded scheme, according to a report in Financial News in July. The issue has now been resolved, with the modifications required for the merger's retirement and pension programmes completed.

For Shearman, which has its headquarters in New York, one benefit will be gaining access to a “dramatically expanded ‘rest of the world’ offering across practice areas”, while the Magic Circle firm will receive “increased board-level recognition and expanded access to a corporate client base in the U.S.”, said the firms in a statement earlier this year.

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&O has now succeeded 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.

"This is a historic moment for both firms and our profession," said Wim Dejonghe, A&O's Senior Partner. "We are delighted that our partners have voted so resoundingly in favor* of this merger, which is a transformational step for the legal industry."

"We have long admired Shearman & Sterling for its outstanding reputation, talent, and client base, and we are confident that together we will create a truly exceptional global firm that will serve our clients’ needs in an increasingly complex and dynamic world," added Dejonghe.

Adam Hakki, Senior Partner at Shearman & Sterling said: "A&O Shearman will be a firm unlike any other in the world, built to achieve exceptional outcomes for our clients through an intentional focus on quality, excellence, and collaboration. We are creating a new industry leader, with truly global capabilities and we are excited for what is to come."

Other UK firms which pulled off transatlantic couplings include Lovells with Hogan & Hartson, 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. 

* An early win for the US side seems to be the new firm's adoption of American spelling.

 


LU iconLet top firms and companies ping your app when they like you for a role. Find LawyerUp on the App Store and Google Play.


 

Tip Off ROF

Comments

Anonymous 20 October 23 08:46

Mergers don't work - it's like dipping pizza in peanut butter. It'd be known as A&O, the transatlantic merged abomination, alongside Squire Patton Boggs and BCLP. Way to go guise. 

Anonymous 20 October 23 08:56

A&O are a competitor but good luck guys.

Making this work will be a big boost to the UK legal industry.

Set up to fail 20 October 23 09:00

Watch the best bits of both firms drift away in the coming years after their lock-in expires...

Panahy 20 October 23 09:05

@Anonymous - You are green with envy because you don’t even have a job, let alone in third rate firms like SPB and BCLP.

 

Anonymous 20 October 23 09:32

Pretty incredible that 99% of A&O partners voted it through. I would have thought there is more than 1% doubt attached to this. 

Anonymous 20 October 23 09:37

9:32 - because as soon as you glean it's inevitable, you don't want your name to be on the short list of people who were against it.

A&Onymous 20 October 23 10:03

Zut Alors! 99% is the same as the conviction rate in Japan for cases wot go to trial. 

Anon 20 October 23 10:26

9:37 has it. If it's obvious it's going through why vote against it - just means you're sticking your neck out for no benefit and you can just leave if you don't like it.

Anonymous Anonymous 20 October 23 13:04

This could lead to greater profits by reducing the number of non legal staff required ie HR, financial and administrative staff.

Pay war 20 October 23 13:59

A&O London NQ salary £125k, Shearman £145k. not the biggest difference, but curious as to whether they’ll be brought in line… 

John 20 October 23 17:00

I think this could be a very successful merger. 

 The A+O culture that we all know and love will still dominate. But they're gaining a US presence that's much bigger than the rest of the MC (including Freshfields). 

If I was Linklaters I would be very, very concerned. 

 

Anonymous 20 October 23 18:42

Pretty incredible that 99% of A&O partners voted it through.

99% didn't vote it through.  99% of those that voted approved.

Anonymous 20 October 23 18:45

 The A+O culture that we all know and love will still dominate

What, the culture they have been eroding over the past few years by trying to replicate a merger by hiring US lawyers one at a time?  

If I was Linklaters I would be very, very concerned. 

Hmmm.  Do we think Peter Bevan is worried about facing off a team with Barnaby and Bob destroying themselves by out-machoing each other?

Links lifer 20 October 23 21:21

@John Nothing to be concerned about because Links is unquestionably stronger than A&O overall based on the latest rankings on Chambers and Legal 500. 

Anonymous 21 October 23 12:32

These decisions get banana republic levels of approval because everyone who doesn’t approve is either finalising arrangements on a new job, or keeping their head down while they look.

Anon 21 October 23 22:00

Didn’t A&O just spend a lots of money opening up a bunch of US offices? Guess that investment didn’t pay off if they need this merger.

Links is deluded 22 October 23 20:56

Meanwhile, Links is still wasting money on “practice innovation” in commodity practices like derivatives

US law firm 24 October 23 15:18

Many US law firms „vote“ by acclamation on the phone. I.e. they unmute the line, everyone shouts aye. 
They do ask for nays and abstentions. Then they hear your voice (or not). I have not yet heard a nay or abstention. 
 

I wonder if AO voted the US way this time. 😆

Dubious 1 24 October 23 20:27

Dont do it!....one firm my end up like the s%#t show that is /was  BLM.

Related News