Source: The Global Legal Post by Robert Bata
The Allen & Overy and Shearman & Sterling merger dominated much of the news about the legal market over the past year, and that is a good starting point for our thinking. On the plus side, the merger, which is due to go live in 2024, will be the first truly successful combination of a UK Magic Circle firm with a US counterpart. On the minus side, there has been a steady drip of departures from the Shearman camp throughout 2023, and that will continue as the US firm’s partners begin to reckon with practice overlaps and a diminution of leadership and management roles.
Looking beyond A&O Shearman, three developments appear likely. First, although the other Magic Circle firms with a US presence have touted their strategy of growing incrementally through lateral acquisitions – and have achieved only paltry visibility and little strategic positioning in the US as a result – pressure within their partnerships will grow for a change of tack to try to replicate the A&O move.
Second, it is now practically inevitable that other leading UK firms will ratchet up their interest in finding an American merger partner, and 2024 will see at least one such deal materialise. The world’s largest economy remains a tempting target for global players, even as the runner-up, China, is increasingly losing its lustre for foreign law firms, as I will discuss in part two of this look ahead.
And finally, the top European independents will be evaluating the defensive strategies available to them, given the sustained Anglo-American campaign to be present, and to expand, on the continent. Another US/UK combination along the lines of A&O Shearman, with powerhouse practice combinations in Europe and a robust presence in Asia, where European firms are not really a factor, would pose a real threat to the dominance of some of the national champions in Italy, France, Germany and Spain, among others.
Read full article: https://www.globallegalpost.com/news/ao-shearman-tie-up-likely-to-set-tone-for-more-merger-activity-this-year-1111564744
