After months of bad news, it certainly seemed like Shearman & Sterling — a firm that brought in $906,936,000 in 2022, putting it at No. 58 in the most recent Am Law 100 — was struggling, with headlines detailing associate and staff layoffs, a scrapped merger with Hogan Lovells, and a sudden change in leadership. What was to become of the former top five earning firm that recently saw its revenue slide down 10% with its partner profits off by 17.5%? At long last, the firm finally has some good news to report, with a hero rushing in to its rescue.
Yesterday, Shearman jointly announced a merger with its knight in shining armor, Allen & Overy. The new firm will be called Allen Overy Shearman Sterling, or A&O Shearman for short. Once combined, the firm will have 3,900 lawyers with approximately 800 partners (30% in the U.S., 30% in the U.K., and 40% around the world), spread across 49 offices. A&O Shearman’s combined revenue will total $3.4 billion, and depending on how their finances are assessed, that would catapult the firm near the top of the Am Law 100 and even higher on the UK 100 (A&O is currently #4).
According to the firms’ joint statement, “A&O Shearman will be the only global firm with U.S. Law, English Law, and Local Law capabilities in equal measure.” The firms went on to note that the merger is “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.”
Allen & Overy has long been trying to expand its U.S. footprint, and even attempted to merge with O’Melveny & Myers several years ago. The talks lasted more than a year, but in the end, it didn’t work out. Perhaps it was all for the best, because now A&O has chosen to partner with Shearman.
Here’s what A&O’s senior partner, Wim Dejonghe, had to say about the proposed merger:
“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.
Shearman & Sterling is 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. 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.”
Adam Hakki, Shearman’s senior partner, also shared his thoughts about the planned combination:
“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. Allen & Overy is an outstanding firm whose work we have long admired and thought of as a kindred spirit. We have both always placed great emphasis on attracting and retaining top talent, were early to globalize, and are relentlessly focused on quality, excellence, and collaboration.
This is truly a game-changing moment for both firms that will create an unparalleled offering for our clients. It is also 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 in the coming years.”
Davis Polk is advising Shearman on the deal, while Simpson Thacher is advising A&O. Best of luck to both firms as their merger plans unfold.
ALLEN & OVERY AND SHEARMAN & STERLING TO CREATE THE FIRST FULLY INTEGRATED GLOBAL ELITE LAW FIRM [Shearman & Sterling]
London’s Allen & Overy to Merge With Shearman & Sterling [Bloomberg Law]
Shearman & Sterling to Merge with Allen & Overy [American Lawyer]
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.