Lovells and Hogan – something transatlantic this way comes?

It's not Legal Week's style to make a fuss when we break stories. As far as we are concerned it's our job to break quality news on a daily basis, so readers will very rarely see references in our stories to Legal Week "revealing" things. But once in a while a story is worth the self-regarding tip, and the merger discussions between Lovells and Hogan & Hartson, revealed exclusively today on legalweek.com, is in that select camp.

The talks are the first concrete evidence to back up the claims made for months by managing partners on both sides of the pond that the general mood is warming to transatlantic mergers. Not on Wall Street, of course. There's still little or no sign that the select band of profitable Manhattan practices are any more prepared to consider a deal with a magic circle suitor. But America's sizeable band of large, upwardly-mobile national practices are, according to many seasoned partners, increasingly asking if now is the moment to hook up with a like-minded London firm while there is still time to book a place in the emerging global elite.

Part of this is due to a more internationalist outlook slowly taking hold among senior US lawyers, but also the willingness from the closest City competitors to the magic circle to take major strategic gambles rather than follow the herd; already this year we've seen Ashurst's US launch and Norton Rose's ambitious tie-up with Australia's Deacons.

But a Lovells/Hogan tie-up is in a different class altogether. Creating a top eight global practice, the combined firm would have revenues of nearly $2bn (£1.25bn) and would achieve quality and quantity across the US, Europe, Asia and the Middle East.

The practice mix also looks right, with both firms focusing on competition, corporate, disputes, real estate and regulatory law. Their finances, though not an exact match, are pretty close (the April year-end and faltering pound arguably makes Lovells' numbers look more out of kilter with Hogan than is the case).

There may be some surprise in the US that Hogan is considering such a daring move. Since walking away from a mooted rescue takeover of ailing Californian giant Brobeck Phleger & Harrison in 2002, Hogan has been on a growth track, but it has so far focused on lateral hiring and manageable takeovers to achieve its goals.

However, interviewed this week by Legal Week US sister title The National Law Journal, Hogan chairman Warren Gorrell said the firm viewed current market conditions as an opportunity for growth. Gorrell is also clear that Hogan wants to build "critical mass" in key international markets to secure more premium work from multinational clients.

The timing for a deal would seem promising. As two quality firms with a broader practice than many of their more deal-driven global peers, Lovells and Hogan should be strong relative performers in current turbulent markets. Hogan's much-vaunted regulatory/Government practice in Washington DC has, likewise, never looked more attractive at a time when the DC market has benefited from a period of massive state intervention in the US economy and radical policy upheaval under the Obama administration.

Obviously, transatlantic deals are fiendishly difficult to pull off, particularly with mergers of equals. Lovells will have to educate partners whose knowledge of the US extends no further than five white shoe practices (yes, there are still some of those), though that shouldn't be a massive issue.

Partner compensation is, of course, a tougher challenge. Hogan, in common with most US firms, has a wider spread between the top and bottom earners in its partnership than the confines of Lovells' modified lockstep. Set against that, a conservatively-run practice like Hogan, with a centre of gravity outside the brittle egos of Manhattan, shouldn't be the hardest American firm to align with a UK practice. There will be many more hurdles before a deal could be sealed but, at first glance, there is much to commend this union.

Click here for Legal Week's coverage of the merger talks