Hogan Lovells And Shearman & Sterling... Potential Merger On The Horizon
Didn't see that coming.
Just when you thought 2022 Biglaw news might ease into an eggnog-fueled nap, German website Juve throws a curveball, announcing “Hogan Lovells und Shearman & Sterling prüfen Kanzleifusion.” And if you aren’t up to date on your Babbel subscription, “Kanzleifusion” roughly translates to “law firm merger.”
Biglaw merger rumors require generous doses of salt. Dealing with this many moving parts presents tons of obstacles in the form of conflicts, billing rates, redundancies, overhead… there’s a lot that can derail talks. There’s a reason we aren’t talking about “Allen O’Melvery.”
Still, at the point merger news hits the press — even “early” merger news — it’s safe to assume that talks have advanced beyond swiping right.
Hogan Lovells has around 2500 attorneys and Shearman boasts about 850. Equity partner profits are roughly comparable between $2.5M and $3M. Am Law says the merger would create the number 3 law firm by revenue (depending on the extent of conflicted out work, of course).
The American Lawyer got statements from the firms and they are as generic as you’d expect from an early stage merger discussion:
Hogan Lovells said in a statement: “As a leading global law firm we regularly review our global strategy and opportunities that we believe may be available to us, and that includes discussions with different firms in the market. This demonstrates our confidence in our unique offering and our balance of practice areas, global footprint and sector strength.”
Shearman’s own statement said: “We continuously consider the various levers of growth that are accessible to us as part of our strategic planning process. These include both internal and external opportunities that would benefit our firm and our clients. Beyond that, we never comment on market rumors or speculation.”
They also report that sources are all over the map when it comes to characterizing the talks, with one saying it’s been going on for some time, another calling it exploratory, and still others having heard nothing until today.
Geographically speaking, the firms have offices in a lot of the same locations. Shearman’s international presence is decidedly smaller than what Hogan Lovells brings so it makes some sense to bulk up the size of those locations, but it’s hard to see what exactly Hogan Lovells gains location-wise. Practice area expertise? Certainly a lot of talent in play here, but if that’s the only goal it’s a lot easier to just pick off a practice group or two in the lateral market. So is this really just a “go big or go home” moment? One plus one doesn’t always make two when it comes to mergers, but smart mergers can turn it into three.
Over the coming months we’ll get a sense of how the firms think this particular equation works out.
Hogan Lovells and Shearman Respond to ‘Merger Talks’ Report [American Lawyer]
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
