Both firms having been through transatlantic merger discussions prior to this, what did you learn to prioritise in establishing whether a merger would be viable?
(WR) First, it needs to be structured as a real M&A deal from the outset, including using M&A lawyers from the firm; subjects like culture, systems and clients must be approached systematically through an M&A lens. Also, you must understand the practice profile of the other firm as quickly as possible – where the practices are located and how they are structured. Third there must be an absolute commitment to confidentiality.
(AC) You cannot negotiate “partner-wide” – a tight team is required during the negotiation phase. You need to move with intensity to establish the merger framework quickly, including principles of leadership and governance – why you are doing the deal has to be clear to partners (in the case of A&O, a merger with Shearman offered a significant U.S. footprint for and for Shearman, a significant global footprint with complementary practices); it needs to be an “obvious” deal from an early stage. You discover what are partners’ red lines when you have been through previous discussions with other firms. Further to Bill’s point about a real M&A deal, you should definitely instruct external advisors at the start and the team must all operate with absolute confidentiality.
(BC) Previous experiences mean that you understand the areas which must be agreed up front when you are doing a transatlantic merger – pensions, cash vs accrual accounting, year-end date, levelling of compensation, exchange rate – you must address these very early on.
How did this merger opportunity arise?
(AC) Shearman was always on A&O’s list of desired potential partners, but previously the opportunity did not arise. The firms knew each other extremely well and were very similar in terms of client base and culture. Both firms had talked from time to time for many years but this time it really clicked.
(WR) The timing was right, and the two senior partners quickly realised that they – and by extension their two sets of partners – largely shared the same vision of what a modern global firm should be.
(BC) Also, our banks were involved at the start of the discussions and they knew both firms well and saw the benefits of bringing the two firms together so it helped to have that external validation early on.
How long did the negotiations last before you announced it publicly?
The deal came together in a matter of weeks.
What are your top two or three items which you think got this merger over the line?
(WR) Speed – we agreed the framework in just a few weeks from the initial discussion between the managing partners.
(AC) External advisors were there from the start, as was a focused representation from the two firms.
(WR) The negotiations did not play out in front of the whole partnership and everyone in the negotiations knew and accepted that concessions would be necessary from both parties.
(WR) Very important was the willingness of Shearman's retired partners to agree amendments to their pension program, which demonstrated commitment to the firm’s active partners. This was crucial.
(AC) Confidentiality was key; also the relationship between the two firm’s senior partners, Wim Dejonghe and Adam Hakki, set the tone. The obvious merits and attraction of the deal - its scale, scope, geographic spread, a one stop shop for clients. The client synergy/lack of conflicts was also important.
What were your priorities for the first six months of the new firm?
(WR) The integration of the conflicts and business intake systems and doing joint work as quickly as possible – partners working together was vital. The integration of systems helped to support this.
(BC) The full integration of financial systems – symmetrical visibility – one bill per client – this really matters. It provides the firm with a high degree of confidence in the figures, which is important in measuring how things are progressing.
(AC) Thoughtful, comprehensive communications, the integration of the IT systems, decisions on governance/practice leaders and co-locating. The A&O partner conference was already scheduled in June so when the merger closed on 1 May, 2024 this was simply expanded to include all partners of the merged firm. Bringing our nearly 800 partners together for the first time had an early, very positive impact on the relationship and integration between the partners.
What has surprised you since the merger on 1 May 2024?
(WR) The first thing is probably how smoothly it has gone. Beyond that, from a legacy Shearman & Sterling perspective, it's clear that a UK regulated firm requires more structure, and I recognise that at this size, a firm needs to be more systematic and that it takes time to get a matrix structure up and running.
(AC) I was impressed by the senior management chemistry across the firm. They have all worked well together and demonstrated adaptability which has set the tone for others.
What are you most proud of in terms of pre or post merger accomplishments so far?
(WR) Being able to influence/contribute to such a great outcome.
(AC) Being a part of the most significant event in my many years with A&O, which has set the merged firm on a new and ambitious path.
(BC) Being a brand-new CFO and being part of this exceptional experience.
What does success look like from your perspective?
(WR) Making good on the promise to clients and markets to offer a seamless, world-class service across key jurisdictions.
(AC) In the short to medium term, existing partners excited by the opportunities the merged firm brings, new talent wanting to join, and clients recognising our unique global offering in all the major jurisdictions.
(BC) Unlocking the potential of the combined firm. Nearly a year in, the merger is delivering real impact, with strong client engagement, synergies, and increased opportunities to lead on major cross-border matters. Our integrated platform is unlocking solutions that no other firm can match.
