News

A&O launches in LA

By on
20

Magic circle outfit scoops 19 lawyers from Akin Gump

Los Angeles

Allen & Overy (A&O) has opened a new office in Los Angeles, having recruited 19 lawyers from US titan Akin Gump.

The magic circle player, which already boasts 44 offices across 29 countries, says its latest recruits will focus on renewable energy work and operate out of the new West Coast hub, as well as its offices in New York and Washington DC.

The new LA office comes after long-running merger talks between A&O and LA-headquartered O’Melveny & Myers ended in September 2019 without a deal being reached. At the time, A&O said there were some “compelling synergies” between the duo but they had “mutually decided not to continue these discussions”.

The 2021 Legal Cheek Firms Most List

“California has obvious attractions in connection with renewables, but the opportunity is far wider,” US managing partner Tim House commented. “The last year has reinforced our commitment to attracting talent in the key practices we are looking to build to serve our clients without a rigid attachment to location or physical offices.”

He added: “California has a deep pool of talent and demand from existing and future clients. This is a great development for the firm in the United States and globally.”

Last summer, fellow magic circle player Freshfields launched an office in Silicon Valley, California, following a hiring spree from outfits including Davis Polk, Sidley Austin and Latham & Watkins.

Sign up to the Legal Cheek Newsletter

20 Comments

Anon

What is the main driver behind moves like this – is it the MC firms’ long-term play (save for S&M) to muscle in in US domestic markets? These team hires are presumably massively expensive and divisive re breaking lockstep?

(9)(0)

Forever Associate

Litigation is way more profitable for firms in the North America than it is in the UK, especially as you don’t have client fees leaving the firm to go to independent advocates. This allows for disputes practices to carry BigLaw firms through market slumps and retain overall profitability. Mix this with the increased number of class actions that result in decade of billables and this all makes for very, very wealthy firms.

That’s why WLG’s total reported revenue nearly tripled when it merged with Gowlings, a firm with offices only in Canada and less than half the headcount of the legacy firm. Same story with the other notable transatlantic mergers with Wombles, Eversheds, etc.

I know this island loves banging on about the benefits of a split profession, but it’s making UK firms miss out on an additional 10-20% profit margins with some archaic belief that it benefits clients. As someone who has instructed counsel to settle defences and applications, and then subsequently (and frequently) had to re-write them when they were complete nonsense, I think it’s time we moved on.

Litigation aside, even in the worst market conditions, USA will always be a more commercial client-rich environment.

(23)(1)

Al

Just out of curiosity, when you do have to make major amendments to pleadings, who ends up signing them?

Is it still going out in the name of original counsel, do you sign, or do you ask the actual party to sign personally?

I can think of a few potential issues arising from that; so it would be interesting to know.

(2)(0)

Forever Associate

As with everything in this bloody profession, word doc in tracked changes sent back to counsel with “plz check and accept”. Then get a bill for them amending pleadings and my time written down by the matter partner. Absolute insanity.

(3)(0)

Al

Thanks for that SA; I appreciate you responding.

I was curious as there’s been a string of cases recently about signing off on pleadings with the usual ‘[party] believes the contents of this…are true” and then of course the relevant witnesses go totally off piste in evidence.

In at least one of the cases the judge referred the poor solicitor who’d signed to the SRA.

So it’s interesting from a risk/professional conduct perspective.

Forever Associate

I don’t see that very frequently in the matters I have been involved with – almost all clients are large commercial organisations and we liaise with their in-house legal teams. I’ve dumbed it down to make a point but there is a fair bit of “project management” that goes on in coordinating the client/expert witnesses, the firm and counsel.

Got off topic though, the point is that the counsel should just be within the firm so that client fees stop once they hit the firm’s account. That way UK firms may start to see similar profit margins to the US firms.

Al

Yeah, I can see why that is beneficial for the firm. Obviously I have a vested interest in arguing it’s better value for the client for firms to instruct counsel. Of course, that might be very different with a US model; if not the domestic market.

There is definitely a bit of a push even here though for new models. Direct and Licensed Access for example.

But thanks for the info; it was an interesting to hear your thoughts.

Forever Associate

No problem! And to be clear, it is my view that there will always be lawyers who are advocacy specialists and lawyers who will never be in courtroom – having a merged profession doesn’t change this. I definitely do not think it should become a “jack of all trades, master of none” situation.

As such dedicated advocacy training should remain, but no one can argue that economies of scale would 1) make firms more profitable and 2) help drive down the current costs preventing a lot of very talented law grads from pursuing the advocacy path.

Happy SPB Associate

Come on SPB what you got ?

(1)(0)

Roflcopter

What are you going on?

(1)(0)

Jacob Charlies

Come on Links, get on the ball!

(5)(2)

Morgan John-Paul

Heh

(1)(0)

Anonymous

LA is a great sleeper legal market. Lots of family offices are now based there and lots of litigation.

(4)(0)

Naysayer

Having seen the A&O culture first hand, my money is on this failing and failing bad, just like their NY experiment a few years ago. The firm culture is far off the commercial pace to thrive and compete with US firms, worse still in America.

(15)(32)

lol

lol didn’t realise that paralegals got an insight into firm strategy

(21)(6)

Naysayer

OP here. Paralegal? Lol.

(1)(5)

Realist

A firm to avoid. Clearly speaks to priorities when they have not increased NQ pay in the UK to pre-covid levels whilst all the while paying Covid bonuses to their US associates to keep up with the market across the pond and splurging on expensive lateral team hires.

A UK based firm that prioritises its US based associates. Great optics.

(19)(8)

Anon

Dear A&O, given the market, UK NQs are unlikely to be a priority for cash allocation relative to profit potential.

(5)(1)

Sceptic

MC firms will keep trying to break into the US market but other than FF it’s only ever been pretty ineffective. These days you can’t be a premier firm unless you have a significant US presence. If you’re a student, bear that in mind. Most of the MC isn’t what their grad rec make them out to be

(7)(10)

MC

There will be a decrease in overall quality of lawyering. It’s like the MC firms in Dubai, Hong, etc, who always field their B team internally, supplemented by local hires from a pool of second rate people.

(11)(1)

Comments are closed.

Related Stories