Full Disclosure:​

Why did they merge?!​

By Jaysen Sutton​

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Hi Reader 👋🏽,

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The Story

You run Allen & Overy, the 12th largest law firm in the world. You’re profitable, prestigious and boast a huge international network across Europe and Asia.

The problem is the US. That has been the problem for decades. Yes, you’ve built offices across San Francisco, Boston, Silicon Valley and LA. Yes, you’ve flexed your pay structure to bring in big name US lawyers.

But it’s not enough.

To be a truly global law firm, to have a real role in the world’s largest legal market, you can’t just have a bunch of satellite US offices. You need a brand. You need a big enough chunk of your revenue to come from the US.

But US clients have built their relationships with US law firms over many decades. They have a track record and, crucially, they’re a hell of a lot more profitable. Those profits attract star lawyers who are well rewarded for their performance.

So what do you do?

You try a merger. Join forces with an established US brand and you have a starting point to compete.

In comes Shearman & Sterling. Yes, it’s had a rough ride recently, especially after collapsed merger talks with Hogan Lovells, but the US brand is unquestionable. Importantly, these days, your profits are broadly similar, which is often the sticking point in transatlantic law firm mergers.

The US is now the key to big ticket private equity, litigation, corporate and finance work. As a combined firm, A&O Shearman has deeper pockets and a genuine global presence. Its success now depends on integration: Can A&O Shearman, together as one brand, convince US clients to instruct them? Can A&O Shearman retain its star lawyers - aligning different cultures and compensation structures?

It's exciting to watch.




Have any thoughts? I'd love to hear your perspective below!

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