UK-based law firm Allen & Overy and New York’s Shearman & Sterling have announced plans to merge, creating one of the world’s largest legal practices. The merger, which is subject to a vote of partners at both firms, will create a legal giant with combined revenues of $3.4B and about 3,900 lawyers across 49 offices.

This merger marks one of the biggest transatlantic legal deals in history. It comes months after the 150-year-old Shearman abandoned merger talks with rival Hogan Lovells. This is the first combination between an elite London law firm and a U.S. rival since Clifford Chance merged with Rogers & Wells in 2000.

The newly created entity will be named Allen Overy Shearman Sterling, or A&O Shearman. Allen & Overy is the significantly larger partner, reporting revenues of $2.3B and employing a total of 5,800 staff globally, while Shearman & Sterling has 1,350 staff and made revenues of $907M last year.

Strategic Move

The merger is a significant step for Allen & Overy’s long-held ambition to become a player in the U.S. market. A previous deal with the California law firm O’Melveny & Myers fell through four years ago when the two sides failed to agree on a valuation. “The deal supercharges our ability to serve clients in the U.S. market, which has long been a strategic priority,” said Wim Dejonghe, the senior partner at A&O.

“Merging with Allen & Overy will dramatically accelerate our ability to meet [clients’] needs in an increasingly complex environment,” said Adam Hakki, senior partner at Shearman & Sterling.

Merger Progress

All transaction milestones have been met thus far and support for the combination among clients, partners, and colleagues has been overwhelmingly positive worldwide. The deal is expected to be put to a vote of partners in both firms. Voting is expected to begin by September 28 and be completed by October 13. 

“Over the past few months, partners and teams from both firms have been meeting and building relationships, and the excitement about the opportunities for the merged firm is palpable,” Dejonghe added. “This response has only strengthened our belief in the transformational nature of this merger. We are both highly confident we will obtain the approval required to bring to fruition this unparalleled combination.”

Hakki explained that this transformative transaction will bring a seamless offering across geographies to tackle clients’ most complex issues. “We have made significant progress since announcing the combination, and our clients have expressed enthusiasm for the combination and what A&O Shearman will be able to deliver. Our partners and colleagues are very supportive and eager to launch the combined firm,” he added.

Looking Ahead

The proposed merger would create the third-largest integrated law firm in the world by gross revenues, with a $1B practice in the US.. “What excites me about this merger is the complementary cultures of our two firms,” Dejonghe said. “We have striking similarities across the board, and I believe we are going to be wonderful partners to one another on this journey.”