The proposed merger between Allen & Overy and Shearman & Sterling is the biggest, and arguably most surprising story in the legal sector in recent years. Joint Managing Director Ben Girdlestone and Account Manager Meg Tillay share their initial reactions to this week’s shock news.
“My instant reaction when news first broke late on Sunday was, after some initial surprise, an immediate visceral response that this is a great match for both firms. Although Shearman has had some challenges of late, the brands feel broadly aligned and the strategic rationale feels really compelling. I immediately sent the story to a number of clients and key contacts as it felt too important to leave until Monday. I’ll leave the detailed analysis of the merits or otherwise of the tie-up to others but from a pure communications perspective, I was taken aback by how quickly A&O in particular must have mobilised after the end of the Shearman / Hogan Lovells merger discussions. I have worked with firms who have entered into merger discussions and the process to reaching announcement point often takes many months. Clearly a lot has gone into getting the joint announcement into shape and the whole thing feels, well, orderly. However, as Law.com highlights in its editorial by Paul Hodkinson this afternoon, most merger announcements are released after a successful partner vote on both sides. So this feels like a pretty punchy move but one which makes a big play to control the narrative – always your number one objective with a merger, restructuring or any type of transformational situation. Speaking personally, I hope the merger goes through. I think it will be transformational for the sector and the catalyst for more exciting tie-ups. What is absolutely true is that the news agenda is well and truly set for the summer and it feels positive after a tough and rather downbeat winter.”
“Considering A&O has been looking to merge with a US firm for years, and Shearman & Sterling has been looking in recent months, this merger makes sense. If it goes ahead, A&O will have added to its US growth ambitions with extra offices in Texas and Canada notably, while Shearman will still have a strong presence outside the US. Both firms have excellent books of business and would complement each other nicely in many aspects. The firms did a great job at messaging this announcement and doing it in such an orderly way. But will it be enough to sway partners into voting the merger through? It will be challenging. Culturally, as history shows, transatlantic tie-ups are much harder to successfully execute than domestic ones. So it’s not a done deal by any means but if it becomes official then not only will it set the tone for other US-ambitious Magic Circle rivals (such as Freshfields or Linklaters) to follow suit, but it could entirely revamp the London legal market and represent the nail in the coffin for the concept of the “Magic Circle” and the traditional prestige associated with it.”
Ben Girdlestone, Byfield Joint Managing Director
Meg Tillay, Byfield Account Manager
