Consolidation in the legal field: Aiming for prestige among the top-tier legal professionals
In the dynamic world of law, the race to become a global player is on. Two major law firms, McDermott Will & Emery and Schulte Roth & Zabel, recently merged to create a $2.8bn powerhouse, joining the ranks of other firms aiming to break into the 'Global Elite'.
The merger's vision for McDermott Will & Emery was to "accelerate growth in the US", a crucial market for any firm's global success. Similarly, Australian-British firm Herbert Smith Freehills merged with Kramer Levin to become a £1.6bn "global legal powerhouse", further strengthening their international brand.
Nick Woolf, partner at Woolf&Co, emphasises the importance of a strong presence in both the US and London for a firm to be a truly global player. This strategy is not exclusive to English firms; Allen & Overy (A&O) merged with New York-based Shearman & Sterling to become A&O Shearman, a move that reflects the growing trend of English firms establishing a significant presence in the US.
However, mergers are not without their challenges. Bryan Cave Leighton Paisner (BCLP), a 2018 merger of St. Louis-based Bryan Cave and the London firm Berwin Leighton Paisner, experienced a loss of rainmakers and high turnover after leadership was shifted to Missouri following the merger. Woolf notes that "there is always fallout for a variety of reasons" in mergers, including individuals losing out on leadership positions or facing significant conflicts.
The legal market is expanding, particularly due to an increase in law firm mergers. Christopher Clark, director at Definitum Search, highlights that the success of these new law firm mergers will depend on their ability to integrate and maintain long-term stability in the competitive legal market. For instance, he points out that the recent merger between McDermott and Schulte Roth & Zabel has given McDermott a market-leading funds practice from day one, which could be a key factor in their success.
As the race for the 'Global Elite' title continues, law firms must balance ambition with careful integration to ensure long-term stability, as noted by Woolf. Maria Ward-Brennan, author of the weekly column "Eyes on the Law," focuses on the legal sector and agrees that the newly merged law giants, such as McDermott Schulte and Herbert Smith Freehills Kramer, will face challenges in integrating and thriving in the ever-competitive legal landscape.
In the end, only time will tell which of these newly merged law firms will thrive and become a part of the 'Global Elite' in the legal sector. Kirkland & Ellis, the highest-grossing and most profitable law firm in the world, generating nearly $9bn in 2024, serves as a benchmark for the ambitious firms seeking to join their ranks.
