Transatlantic law firm mergers have a long history. But the pace and scale of recent announcements have demonstrated a distinct upswing in merger activity, leading one commentator to suggest that they have evolved from early 2000s expansion efforts into a “frantic” wave of consolidation. The most recent came last month when partners at Winston & Strawn and Taylor Wessing formally approved their merger with the combined 1400-lawyer firm, Winston Taylor, which is anticipated to launch in May.
This announcement followed hard on the heels of last December’s news from Hogan Lovells and New York’s oldest law firm, Cadwalader Wickersham & Taft. Their joint announcement revealed an intention to create the biggest ever such combination: 3100 lawyers and $3.6 billion in revenue across 38 offices in 18 countries, which would make it one of the largest players in the international legal market.
Emblematic of a fundamental realignment in the global market for legal services, these high-profile mergers further confirm the widespread impetus to merge. They will, therefore, not be the only such mergers between transatlantic law firms in the year ahead. The trend looks set to continue as firms seek to strengthen their client offerings across finance, disputes, corporate/M&A, and regulatory work, diversifying revenue streams and enhancing their resilience to domestic market volatility.
The rationale for transatlantic mergers is straightforward: the global market for legal services has become increasingly saturated by an expanding cohort of elite law firms that offer similar or sometimes overlapping services to a relatively finite number of clients.
Naturally, such mergers offer US lawyers wider exposure to international practice, simultaneously enhancing their career development and cross-border expertise, as the merged firm’s scale and global footprint provides increased access to larger, multi-jurisdictional deals. Those firms which aim to succeed in the enduring war for talent also tend to benefit most from the increased market share that arises post-merger.
But driven by multiple factors, the transatlantic urge to merge does not always result in automatic success. When managing the fusion of different structures and distinct cultures, history shows that the practicalities of integration are complex and often fraught with difficulty.
Look back a generation and the groundbreaking three-way merger in 2000 between Clifford Chance, New York-based Rogers & Wells and Germany’s Punder Volhard Weber & Axster has since became a case study on how the apparent benefits of a transatlantic merger can be subsequently devalued by integration problems.
More recently, a number of proposed mergers between US and UK law firms have failed at the negotiation stage.
After intense and protracted discussions, Allen & Overy (A&O) and O’Melveny & Myers announced in 2019 that they were calling off their merger plans. Similarly, in 2023, Shearman & Sterling and Hogan Lovells mutually agreed to call off their merger talks. On the rebound and within a matter of weeks, A&O and Shearman & Sterling announced their planned merger in the most significant transatlantic tie-up to date. By May 2024, the deal was done.
The successful A&O Shearman merger has since encouraged others to follow down a similar path: Herbert Smith Freehills merged with Kramer Levin in December 2024 and, most recently, Ashurst tied up with Perkins Coie last November. This further serves to highlight the shift toward transatlantic integration as competition for top lawyers intensifies on both sides of the Atlantic.
Such recent mergers have increasingly focused on deep integration, aligning profit-distribution and remuneration systems, and shifting away from looser Verein structures as happened in several mergers in the two decades before 2020.
However, newly merged firms still need to be ever vigilant in avoiding and mitigating potential cultural friction. Equally, they need to alert to market perception as attorneys and clients may be concerned by an elevated risk to the merged firm’s ability to maintain specialized practices as some partners leave, creating short-term market instability.
Leadership clashes can also emerge as US and UK partners integrate. Inevitbaly, there will be differences in management style, compensation structures, and strategic priorities, which can often lead to partner departures. It is also vital that newly merged firms communicate clearly with their clients during the integration process, particularly on complex cross-border matters.
Many of the historic barriers to merger between US and UK law firms – most notably, differentials in revenues per lawyer and most critically, partner profitability – have diminished over the past decade. An increasing number of Am Law 100 firms now sit comfortably within the profitability range of their UK counterparts, increasing the pool of potential transatlantic merger partners.
Although these mergers are not without risk, the flourishing US legal market looks set to remain an attractive proposition, making further consolidation inevitable. As big international law firms re-position their client offering with the aim of creating integrated, global, multi-disciplinary practices and securing long-term global competitiveness, it therefore comes as no surprise that multiple UK-US merger talks are reportedly taking place behind closed doors.
