Since the A&O Shearman merger went live in May, there has been no shortage of market speculation about which transatlantic duo would be next to tie the knot.
However, few had predicted Monday’s (11 November) news that Herbert Smith Freehills is set to combine with New York’s Kramer Levin, a deal which will create a new $2bn, 2,700-lawyer firm.
The proposed tie-up, which the firms announced in a joint statement, remains subject to a partner vote at both firms, but if confirmed, is set to go live on 1 May next year.
The combined firm will be known as Herbert Smith Freehills Kramer – operating as HSF Kramer in the US – and will operate with one single global profit pool, following in the footsteps of A&O Shearman, which also eschewed the verein model.
While HSF is the much larger of the two firms, with 23 offices across Europe, Asia-Pacific, the Middle East, New York and South Africa, Kramer Levin is the more profitable, with 2023 profit per equity partner of $2.41m (£1.87m), according to law.com, compared to HSF’s 2023-24 figure of £1.315m.
HSF’s revenues of £1.3bn will be boosted by around £330m by the deal, pushing it past the $2bn mark and placing it on the fringes of the world’s 25 largest law firms.
While HSF has had a small New York base since 2012 – the same year the merger between legacy UK firm Herbert Smith and Australia’s Freehills went live – it has long harboured ambitions to bulk up in the States. In a statement, HSF chair and senior partner Rebecca Maslen-Stannage (pictured) described the deal as ‘transformational’.
‘We have long been committed to expanding our offering in the US and Kramer Levin is the perfect fit,’ she said. ‘The combination delivers immediate growth for both firms from day one.’ Global CEO Justin D’Agostino added that the deal was ‘just the beginning… an excellent long-term, strategic move.’
Kramer Levin is led by co-managing partners Howard Spilko and Paul Schoeman, who described the deal as ‘a one-of-a-kind opportunity’, while also citing the firms’ cultural alignment.
In addition to its three US offices in New York, Washington DC and Silicon Valley, Kramer Levin also has a well-established Paris base, which has been in operation since 1999, although this office will be spinning off and will not be part of the merger.
In terms of practice strength, Kramer Levin has five top-tier Legal 500 rankings: advertising and marketing litigation; immigration; land use/zoning and both corporate and municipal restructuring.
The US firm also has rankings for commercial disputes, employment litigation and appellate work, adding heft to HSF’s traditional disputes credentials, as well as transactional capabilities in mid-market M&A and private equity.
Announcing the deal, the firms cited shared strengths in private capital, M&A, restructuring, securitisation, real estate, white collar corporate crime and investigations, class actions, IP, and arbitration.