After talks end with 1 BigLaw firm, Shearman announces plans to merge with another
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Updated: Shearman & Sterling and Allen & Overy announced a merger Sunday, just two months after Shearman and Hogan Lovells called off merger talks.
The new law firm will be called Allen Overy Shearman Sterling, or A&O Shearman for short, according to a May 21 press release.
The combined firm will have 3,900 lawyers across 49 offices. Combined revenues will be $3.4 billion. Allen & Overy “is by far the larger of the two firms, with more than 3,000 lawyers around the globe,” according to a Bloomberg Law story on the merger.
The merger agreement is subject to approval by 75% of the partners at each firm, Bloomberg Law reports in a different story. The vote could happen in June or July, a Shearman spokesperson told the publication.
According to a previous report by Law.com, Shearman has seen “a string of departures,” most of them overseas, and its international offices were underperforming. Allen & Overy, meanwhile, “has struggled to retain some top talent in the U.S., often seeing partners in America recruited away by U.S. firms,” Law.com reports in a story on the merger announcement.
Adam Hakki, a senior partner at Shearman, told Law.com that Shearman and Allen & Overy are “very similar in terms of client base and culture. We have talked from time to time for many years, but this time it really clicked.”
The merged firm will use a “modified lockstep” partner compensation system that is similar to the structure used now by both firms, the Shearman spokesperson told Bloomberg Law. The system is seniority based, but rainmakers and star partners are paid more.
Updated May 24 at 10:24 a.m. to include new information from Bloomberg Law.