US firms operating in London are increasingly willing to explore a UK merger, with nearly half now open to a tie-up; while the number looking to increase their headcount organically in the City has fallen.
Legal Week’s annual US firms in London survey reveals that 47% of US firms would be willing to consider a UK merger, up from 39% last year and 29% the year before.
The survey of the top US firms operating in the capital also records a fall in the percentage of firms looking to build their City practice over the coming 12 months, with 91% earmarking growth, compared with 96% in 2006.
The findings provide one of the clearest indications yet that US firms are increasingly looking to mergers to kickstart their growth in London. Among the firms open to the possibility of a merger are Dewey Ballantine, Morrison & Foerster and Paul Hastings Janofsky & Walker.
Despite some hires from UK firms — such as Kirkland & Ellis’ raid on SJ Berwin for rated fund partners Mark Mifsud, Richard Watkins and Justin Dolling — US firms have struggled to recruit and retain senior partners recently.
A number of US firms are now focusing some of their efforts on swelling their junior ranks by taking on City trainees for the first time. Firms including Fried Frank Harris Shriver & Jacobson and Kirkland are expecting to take on trainees for the first time soon, while Cleary Gottlieb Steen & Hamilton, Covington & Burling and LeBoeuf Lamb Greene & MacRae are all increasing their intake.
CMS Cameron McKenna managing partner Dick Tyler commented: “We have had more courtesy calls from US firms in the last six to nine months than the last 18 put together. There is a critical strength you have to reach and realistically if you want to have a strong corporate practice, you need employment, pensions, etc as support.”
Abrahams Russell recruitment consultant Greg Abrahams said: “This is driven by London becoming arguably the leading financial centre in the world and the closing gap between UK and US profitability. With the dollar/sterling exchange rate as it stands, there is more demand on the US side for a merger than on the UK side.”
Talkback: Do US firms need to rethink their London strategies? Click here to have your say.
Imagine telling your mates your firm was merging with Cameron McKenna. Wouldn't be worth the loss of face.
Probably not as bad as telling clients you were merging with Rowe & Maw.
What we need to see is a real US/UK merger, between real players (ie not like DLA Piper). So, step up the magic circle. Freshfields may now finally be ready to do that deal with Debevoise after its push on dumping partners from the top of its lockstep. It has also upped its focus (if that was possible) on transactional work in Europe. The stage is set. The pound is strong against the dollar, Freshies has done the painful trimming, all that is left is the will to push it through all the way, and go beyond previous low key exploratory talks. First mover advantage is not everything, but the list of top US firms that would ever merge is tiny. As with Germany in the late 1990s/2000 there are less than five big players that would do the deal in the right conditions. Whoever moves first gets the best choice. (And besides the strategic bonus it would bring to any firms that did the tie up it would certainly make the legal media more interesting to read - partner move/management re-jig stories are getting a bit tiresome. Let's get back to some solid law firm merger action.)
Still glad you went to O'Melvenys, then?
None compare to the shame of having to say, the firm I worked for merged with Piper Rudnick!
At least you're not working for an accounting firm.
DLA Piper Rudnick doesn't appear to be much of a merger. They (openly) report different profit centres, which hardly goes to "One Firm" and is more like "Many Franchise Holders". On a very painful deal I worked on recently, the annoying banking lawyer at DLA London did things totally his own way, unlike his colleagues in NY and Germany. The reason for not following his American and German colleagues? "They actually belong to a different firm." Brilliant stuff.
both cc and goulden's have arguably had drops in reputation since their mergers. what advantages has DLA been brought, its still on the same rung as eversheds. Who will a merger be good for?
I wish SJ Berwin would merge with Northern Rock so I could get made redundant and join a happier place after 6 months travelling around the world.
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