When troubled New York law firm Shearman & Sterling’s merger talks with its transatlantic rival, Hogan Lovells, collapsed in March, Shearman’s Adam Hakki knew who to call.
Days into his role as senior partner last month, Hakki picked up the phone to ring Wim Dejonghe, the long-serving leader of Allen & Overy, one of London’s elite magic circle law firms. In a matter of weeks, the two were cloistered in a Manhattan office hashing out a $3.4bn merger, which — if voted through — will be one of the biggest the industry has ever seen.
For Belgian-born Dejonghe — A&O’s first foreign senior partner and before that, managing partner — a tie-up with a Wall Street firm will be the fruition of a two-decade-long project to crack the most lucrative legal market in the world, leaving its British rivals in the dust. For Shearman, it offers a route out of a torrid period of partner exits and difficult restructuring.
“I’ve known Shearman for a long time. [Hakki] got into the role [and] he knew we were interested,” Dejonghe, 62, told the Financial Times. “The initial conversation was between me and him. After a number of meetings between the two of us, we thought: ‘this might work, actually’.”
Shearman, a storied 150-year-old firm that once advised the cream of corporate America, is the far smaller entity, with $907mn in revenues last year and about half of A&O’s more than 40 offices. But it has long been on Dejonghe’s dance card as a potential suitor because of crossovers in banking and finance.
Both firms had also learned lessons from previous failed mergers: in A&O’s case, collapsed talks with California-headquartered O’Melveny & Myers, which ground to a halt in 2019 after 18 months of negotiation.
“We knew [if] this leaks before we go to our partners, we’re dead,” said Dejonghe. “So we agreed the only way we could deliver something to [partners] was to sit together in a room for weeks and hammer out all the details.”
Shearman declined to comment.
With a small core team — including advisers from heavyweight Wall Street law firms Simpson Thacher & Bartlett, and Davis Polk & Wardwell — Hakki and Dejonghe decamped to investment bank Lazard’s offices in Manhattan to pull together what would land on Sunday as a slick announcement, complete with website, client FAQs and video.
Dejonghe’s predecessor, David Morley, credits him for the speed of the Shearman talks, which were executed within weeks. “Very few…
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