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Partners from US giant O’Melveny & Myers jet into London to hold mega-merger talks with Allen & Overy

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Discussions reach ‘due diligence stage’, report claims

Allen & Overy‘s top brass have met with senior partners from US outfit O’Melveny & Myers as transatlantic merger talks between the duo heat up.

The potential link-up, news of which first emerged in April, would create a new global outfit with over 3,000 lawyers and combined revenues of £2bn ($2.8bn), making it one of the world’s largest law firms.

It has now been reported that discussions between the two legal powerhouses have reached the “due diligence stage”. According to Legal Week (£), several members of O’Melveny’s management team jetted into London last week to meet senior figures at A&O.

It is said that representatives from both sides, including O’Melveny’s chairman Bradley Butwin and A&O’s senior partner Wim Dejonghe, met at the magic circle outfit’s Spitalfields headquarters. A&O’s managing partner Andrew Ballheimer and New York senior partner Tim House are also understood to have been present.

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Responding to the report, a spokesperson for Allen & Overy told Legal Cheek:

“We have been clear that developing our presence in the U.S. is a priority for us and that we have spoken to a number of law firms there. However, we do not have any developments to announce and would reiterate that we won’t comment on any particular firm until the right time.”

O’Melveny & Myers has been approached for comment.

The face-to-face meeting comes on the back of a strong set of financials for A&O. Profit per equity partner (PEP) at the magic circle player jumped by 4% to £1.64 million, while revenues rose steadily to £1.57 billion. Net income hit £690 million, an uplift of 3%.

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37 Comments

Anonymous

A&O&O’M&M. It doesn’t look like the most obvious choice of merger partner for A&O. They’re essentially getting a West Coast Tech firm, that has fallen behind Cooley and Orrick for £500m of revenue. It looks to me like this is a better deal for O’MM.

Anonymous

No thank you, Im not learning any new names.

Anonymous

So annoying when firms do this.

Anonymous

Why are A&O so keen to do this?

Weird

Anonymous

too many players around.
MC type firms will have to adapt (ie merge), or die.
let’s see who’s the dodo

Anonymous

KWM last year?

citylaw

This is tragic really. 10 years ago MC firms were running around New York trying to merge with SullCrom/David Polk/Simpson and/or Latham/Kirkland only to be rudely rebuffed.

But years of low growth and flat-lining profits have meant that there is now even less interest amongst the US elite to merge, and A&O have had to substantially lower their US ambitions – according to Vault O’Melveny is the “26th most prestigious” law firm in the US.

Anonymous

You must be a fresher. The vault rankings are irrelevant. OMM is not Irwin Mitchell. Swallowing up their offices isn’t going to devalue A&O’s global brand. A&O do not give a shit if they are 26th or 10th.

The question is what value can OMM add? If they have stronger capabilities in certain practices/jurisdictions than A&O, which they do, then a tie up could increase profitability. Fact is OMM > A&O stateside.

Anonymous

Not sure why I am being down voted. To be clear: it’s obviously true that A&O would rather merge with SullCrom or Simpson, but those firms are absurdly profitable and have a distinct identity built on high-end services in a few select markets. It’s not that A&O isn’t prestigious enough for them, it’s that they aren’t interested in merging with anyone.

I’m not at all sure that this a good move but A&O isn’t doing this to increase its prestige, it’s doing this to try and make more money. Given that A&O is essentially a mid-tier firm in the US, and how potentially lucrative the US market is, it’s an obvious market to try and expand in.

citylaw

A&O (and the rest of the MC) see themselves as peers of the elite US firms and think that they compete on the same level. However, in reality, A&Os profitability means that it doesn’t, hence, the realistic (but necessary) step down to a firm like O’Melveny.

As you say, the MC haven’t remotely cracked the US,but, to be clear, merging with a mid-tier firm like O’Melveny won’t help them fulfil that ambition. It won’t help them achieve their (unlikely) ambition to be the world’s leading elite law firm. It’s also a major ego blow for partners at A&O who still see themselves as peers/competitors of SullCrom/Simpson/Kirkland/Latham, rather than O’Melveny.

Anonymous

MC partners do compete with the likes of SullCrom. If you think otherwise then you’ve clearly not worked on the matters top practices bring in.

Anonymous

Original anon here.

Agree with what you are saying about the ego blow.

But I also agree with the guy above. A&O does compete with SullCrom. In London, elite US see MC as their biggest competitors. They poach junior associates from MC because those people generally have the best experience – which is a consequence of the quality of work brought in by MC partners.

scepticallaw

A&O merging with O’Melveny (already being touted by A&O as a ‘merger of equals’), points to the opposite. The MCs relative decline has been caused by a number of factors:

– MC firms have lower profitability than elite US firms because they have, as a general rule, expanded into non-core jurisdictions ;
– Because of that lower profitability elite US firms won’t merge with MC firms because they are so much less profitable, because to do so would lower their PEP;
– Because they ware much more profitable, elite US firms can afford to recruit some of the MC’s most profitable partners with relative ease and without damaging their bottom line;
– As a result, the MC firms are stagnating and struggling to grow their bottom line (e.g. Kikland’s PEP is £3.4m which is more than Links and Freshies combined (£1.5 and £1.7m).

Anonymous

At the end of the day its all about the dolla.

A&O don’t bring it in the same way Kirkland & Ellis do. Hence why a firm of a calibre similar to K&E wouldn’t merge with A&O.

Why dilute your PEP for some other hangers on just to get a higher overall revenue?

Anonymous

Bizarre idea to do the merger now. Despite CC largely failed to capitalize on the Roger & Wells tie-up back in the 1990s, for A&O to shack up with O’Melveny now is difficult to comprehend.

Anonymous

“O’Melveny & Myers has been approached for comment”

‘Jesus Christ get Butwin on the line, Legal Cheek have the story, how the hell are we going to contain this?’

Anonymous

“Yes Mr Butwin sir. I said Legal Cheek. Cheek… Yes they’re real… No, sir, it’s not a joke. I know it’s a stupid name for a website, but they are real. Some guy called Thomas Connelly keeps calling. I’m sorry you don’t believe.. sir… but I have a family…! You can’t fire me! Sir..?”

Anonymous

Clifford Chance are growing their own tech firm, see the 5 tech based training contracts in the other of article.

I wonder if slow and steady wins the race….a and o have moved on from this model, but is it wise to ?

Imagine if this us minnow as part of the due diligence simply clocks a and o’s clients and then tips off its own clients about which businesses outside the us they should contact to expand.

Then as quid pro quo the US clients agree to continue to instruct the minnow leading to the minnow opening bespoke offices in other jurisdictions itself.

Whose clients are the master masons of the new world order ? Is it evenly split or is it the US firms ?

I would say to dejonghe, ballheimer and house…if you haven’t got anyone from the criminal intelligence agency working for a and o, check the minnow hasn’t either. If they have, be warned, you just run a 2bn turnover law firm !

Anonymous

u wot m8?

Anonymous

You have to watch America in business, in case you are dealing with the CIA, is the undercurrent.

America are currently trying to redress their trade deficit at 100mph.

This due diligence exercise could be an easy way to do it.

If, as I suspect, the US clients comprise the master masons, it occurs to me that the minnow itself would not need a and o.

They would just need business contacts who would, for example, be vehicles for the minnows ‘ clients’artificial intelligence patents.

The CIA, to my mind, act in tandem with The interests of the 6 or so banks that comprise the us federal reserve. They can do so because of their constitutional autonomy on the one hand, and because of the breadth of the narrative of what us national security comprises on the other. (Which gives them their vires)

Now, your senior partners of a UK law firm may not realise the power of the CIA because (i) the CIA are unlikely to ever use them and (ii) the uks tie in to the new world order is derivative through Soros and demographics, whereas the us businesses, at the top of the food chain, are tied in to the six banks of the federal reserve, trump’s power as president, putin’s power similarly, and the third world war. (Which will be a conventional war and regeneration exercise similar to iraq/ baghdad, if i am not mistaken)

Businesses linked to the non Soros nwo will be on the march now because their circle of power has been completed with the putin trump pact, and the declaration of war against Soros which was hidden within it.

I hope that helps m8. Running a law firm, however big, is stoke city with Peter crouch up front in the premier league. Running the CIA is like running Argentina in the 1986 world cup with maradona up front. There is so much more to the CIA than Allen and overy. There is so much more to managing a world cup win than coming 10th again in the premier league.

I may be mistaken. The minnow may play fair, but Soros ‘progress has attracted enemy action. He funds his journalists, tothers fund weapons and war time alliances and surveillance.

As we saw in Iraq, you can whack a media outlet in one air raid and scare the shit out of the surviving journalists in a trice. Soros is new money, so he does not instinctively appreciate the dynamics of big wars when he moves his chess pieces around.

Anonymous

help! make it stop

Big Dolla

Is that you De Montford?

Anonymous

Hello big dolla.

Anonymous

The thing is – A&O made a right dog of their party. If the cakes no rise, then why pay the US fees?

Anonymous

I am in support, for one, I would welcome the chance to say the “AOOMM LLP” out loud.

Yaxley Lennon

Oh Tommy Tommy!!

Anonymous

Interesting combination: a UK banking firm with a US litigation firm. Surely no conflcit ahead.

Death of the MC

’twas a good innings

hihi

someone got jealous of BLP and Bryan Cave

Anonymous

What’s A&O like to train at compared to other MC firms? Better, worse, similar?

Anonymous

Similar. Next question.

Anonymous

Having completed training contracts at all five magic circle firms, I can confirm that the answer above is correct.

Anonymous

0’melevny. back off to southern eire with ya chaps.

but i wanted to merge with kirkland

:'(

Anonymous

good joke

Legal Beak

Legal Cheek: Partners from US giant O’Melveny & Myers jet into London to hold mega-merger talks with Allen & Overy

Legal Week/The American Lawyer: O’Melveny Management Jets Into London as Allen & Overy Merger Talks Continue

I wonder who’s copying whom…

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