It could soon be all change for New York heavyweight Shearman & Sterling. Should a proposed merger with Magic Circle member Allen & Overy fulfil all the customary closing conditions — which includes a vote of approval from each firm’s partnership — the firm will be rebranded Allen Overy Shearman Sterling (or, A&O Shearman for short). The transatlantic mega-merger would create the third largest law firm in the world with 3,900 lawyers across 29 countries and eye-watering revenues totalling nearly $2.8 billion. Be sure to check-in with Legal Cheek for all the latest updates on this tie-up of epic proportions.
In the meantime, business at S&S continues as normal. The firm’s financial data for 2022-23 reveals a 11% drop in global revenues, which are down to $906.9 million (£710.6 million), after crossing the $1 billion mark the year before. Similarly, profit per equity partner (PEP) dropped 18% to $2.48 million (£1.94 million) after breaching $3 million in 2021-22. The firm’s finances were hit by the economic headwinds that have impacted the legal sector both in the UK and the US, with Shearman’s transactional practice areas being particularly affected. The number of equity partners fell from 113 to 95, while the firm appointed 20 new non-equity partners. Total headcount remained relatively flat at around 720 across 23 international offices. The firm is also under new leadership, with previous co-global managing partner Adam Hakki stepping up as senior partner in spring 2023. This promotion came when David Beveridge announced he was stepping down from the position after merger talks with Hogan Lovells broke down. Yes, that’s right, Shearman was also in talks to combine with fellow US outfit HL earlier this year, but both sides eventually decided a deal was not in their best interests.
New management and possible mega-merger aside, Shearman continues to secure top-notch work on billion-dollar deals. Highlights include advising NEOM on their $8.4 billion world-scale green hydrogen and green ammonia production facility, and working with a consortium of investment banks, including J.P. Morgan and Santander, on the issuance of the Republic of Peru’s bond issue worth close to $2.5 billion.
The firm has its origins in Wall Street and is known for its big-bucks deals in finance and capital markets work. Finance, M&A and project development and finance, make up the London office’s three biggest practice areas. It has grown into one of the biggest law firms in the world, with seven US offices, a further 15 in other countries and three associated offices. It has a long track record in the UK, dating back to 1972, and as of 2016 was earning about a fifth of its revenue here (the firm hasn’t reported its London-specific earnings since then) but as a global partnership, the share of the prize-pot is split evenly across the offices anyway. A training framework as well developed as most UK firms is, perhaps, just as important as the cash. Still: this isn’t a place for people who need their hand held.
The 12 trainees that the firm takes on each year are given “very little formalised training in most seats (though that’s no bad thing necessarily),” according to one insider. “On-the-job training varies from supervising lawyer to supervising lawyer ― some will provide fulsome contextual discussion and explain exactly how to do things and why they’re done, whereas others will point you in the general direction and leave you to figure everything out for yourself”. It’s not wholly a case of sink or swim, however, as “the main seats have a formal induction series which is really useful to hit the ground running”, reports one trainee, and there are also intermittent group training sessions. Moreover, Shearman does not shirk from awarding responsibility to its trainees, “enabling rapid progression with on-the-job learning”. One rookie describes it: “From becoming an expert in a new area of law, to drafting court submissions, to interviews and meetings, trainees can find themselves going from complete novice to NQ level work in a very short space of time.”
Quality of work is “generally very good ― trainees are quickly given a lot of responsibility, particularly later in their training contracts,” a junior at the firm reveals. Another details that there has been “ample opportunities to work on highly interesting matters, from the commercially eye-catching to technical legal concepts”, which this rookie says is a “testament to the quality of our clients”. “Procedural work is inevitable but limited, and there is a genuine desire to expose trainees to substantive work (which, given the calibre of the firm, tends to be very interesting).” Another junior highlights that “the small teams really do mean pulling your own weight on deals and growing to own and manage your own workstreams, especially in transactional seats”. Trainees can expect to be exposed to a variety of associate-level work early on.
Given the emphasis on informal training and strong possibility of finding themselves thrown in the deep end at work, rookies may need to turn to each other and broader colleagues who are “always there to support”. Happily, the firm achieved top scores across the board for its “supportive peers”, in The Legal Cheek Trainee and Junior Lawyer Survey. As one amiable type put it, “the firm does a very good job of not picking jerks as trainees”. Survey respondents enthused about their “friendly” and “collaborative” colleagues. Even when pitched against each other for a qualification spot, there were “no sharp elbows”. Post-work drinks are “a regular occurrence and they’re only a teams message away if needed throughout the day. Trainees make time for each other and are more than happy to share their experience and knowledge from previous seats. Each intake is diverse but the one thing trainees have in common is their willingness to help each other”.
Further up the Shearman tree, “the best supervisors really are fantastic and the worst you can be a professional and live with,” one lawyer says. Another describes the Shearman superiors as “very approachable. No hint of an archaic, overly-hierarchical communication culture between juniors, seniors and partners”. That’s not to say they’re all sweetness and light all the time. A TC veteran says: “Generally pleasant, but a few difficult personalities (the ranks of whom appear to have swelled somewhat recently). Certain departments are definitely more approachable than others.”
Development is furthered by the keenness of the firm to send trainees on international secondments, with trainees typically spending time in locations such as New York, Singapore, Abu Dhabi and Brussels.
Needless to say, NQs work hard for their six-figure salaries. We are told that rookies need to be able to work in intense bursts when required, with hours that are sometimes “brutal”, especially in the transactional departments which are said to be “shockingly bad” for work/life balance. Long weekdays are expected and it is not unheard of to have weekends interrupted, although holidays usually remain sacred. There is also no expectation of face-time when it’s quiet. Another trainee reports: “Stamina is a skill you learn quickly, but if there is no work to be done associates will wonder why you are sticking around.” Spies report that weekday hours are often intense but weekends and holidays are generally respected in non-finance seats and, if it’s 5.30pm and there’s nothing to do, “no-one looks twice if you leave the office”.
Another describes it like this: “The reality is that working for more or less any City law firm is not going to be a 9-5 affair. Although anecdotal, my experience seems to have been better than many friends in magic/silver circle firms, and hours, as always, are often practice group dependent. Nonetheless, 9-7 is a quiet day, you will generally expect to be ordering a firm subsidised Deliveroo at least 1-2x a week and, although generally only interrupted when necessary, weekends are in no way sacred. The firm is pretty good at respecting holidays and there is a broad collegiate culture around shielding people while they’re away as much as possible. At the end of the day, the work/life balance is not too bad, and seems better than many other firms, but this is still corporate law so the expectations are still high.”
Currently, Shearman operates a hybrid working model where lawyers spend at least three days per week in the office. The firm has, we’re told, adapted well to the post-Covid dispensation, with home desktops supplied and “IT staff available to advise on WFH-specific things”. The perks are well targeted: for example, a £30 food allowance for those working after 8pm and at the weekends is among the most generous in the City, and a smart way to make up for Shearman’s lack of a canteen (which is a frustration at lunchtimes: “you have to choose between an £8 lunch from the likes of Pret, or using any precious free time you have cooking up lacklustre lunches for the week”).
To burn off all those Deliveroo meals, the firm offers a high subsidy for Virgin Active membership that reduces the cost by around two thirds. Coffee is also provided for free to help newbies grind through the long hours and partners are known for showing their appreciation for the team’s hard work with their generosity when hosting drinks and meals. Back in London, the firm proved it listens to its lawyers and support staff by giving everyone, including trainees, the option to work remotely for the entire month of August. The initiative was granted following an internal survey carried out by the firm into its working policies and has proved to be one of its most popular perks, along with the option to work remotely during the lull between Christmas and New Year.
The firm’s office provides standing desks on request but is otherwise one of the less spectacular City law gaffs. There is no canteen, for a start, and some parts are “windowless”. While usually “warm and clean”, it is “rather drab”, according to one source. Perhaps they could bring in some scatter cushions? The location is good, right by Spitalfields market at Liverpool Street station, “ideally placed for food/ drinks/ commuting”.
Legal tech is “fairly bog-standard” although there are “some discrete legal technologies which the firm has adopted which are genuinely value-additive and timesaving”. One trainee puts it diplomatically: “There are trials of new tech upon occasion, but I don’t think this is the firm’s USP.” In terms of its environmental responsibilities, the firm works with clients on both fossil fuel and renewables projects, but does a lot of environmental pro bono work.