Legal Business

A&O Shearman Johannesburg team heads for Bowmans after office closure

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Strategic recruitment A&O Shearman

African firm Bowmans announced today (3 October) that it has hired all the lawyers from A&O Shearman’s shuttered Johannesburg office, including eight partners and a further six lawyers who are set to join as partners.

The moves include Johannesburg office managing partner Gerhard Rudolph and partners Deborah Carmichael, Ze’ev Blieden, Alexandra Clüver, Ryan Nelson, Callum O’Connor, Alessandra Pardini, and Brian Price.

Also joining Bowmans as partners are Mongezi Dlada, Alexandra Fekis, Kelle Gagné, Amanda Jones, Benjamin Mbana, and Nikita Shaw. All of the new hires will start at the firm in January 2025.

Allen & Overy has been in South Africa since 2014, when it launched with the hire of a seven-strong banking and finance team from local firm Bowman Gilfillan, led by banking partner Lionel Shawe. Rudolph and disputes partner O’Connor subsequently joined the office from Baker McKenzie in 2017.

While Shawe left to join White & Case in 2021, the base continued to build, with Clüver, Nelson, and Pardini all joining from Webber Wentzel later that year, followed by Blieden and Price, who came over from Werksmans in 2022, and Carmichael who joined from ENSafrica in March last year.

‘We are excited about this prospect because it aligns with our strategic objective of being the ‘go to’ African law firm in advising clients on their most complex legal challenges and opportunities across the continent’, Bowmans chairman and senior partner Ezra Davids said in a statement. ‘The team’s strengths in the banking, energy, mining and infrastructure sectors together with their expertise in transactional and disputes work across Africa will bolster our offering in these areas.’

Rudolph added: ‘Bowmans has a compelling value proposition. The firm’s comprehensive offering will provide opportunities for our lawyers to expand their practices. Its African footprint will enhance our ability to serve clients and provide access to new mandates.’

The hires for Bowmans come after it deepened its Johannesburg corporate bench in April with the hire of a four-lawyer team from Bakers led by M&A team co-head Angela Simpson.

The news comes less than a month after A&O Shearman revealed its plans to shut in South Africa. The newly merged firm has also said it will cut 10% of its total partnership and shutter the Consulting by A&O Shearman business it first launched in 2018. Other recent partner departures have included London-based private capital sector co-head Philip Bowden, who went to Proskauer in July with acquisition finance partner Megan Lawrence, and City leveraged finance partner Vanessa Xu, who left for Kirkland just before the merger completed in May.

A&O Shearman is not the only major firm pulling out of South Africa; news of its exit was quickly followed by the announcement that Hogan Lovells is also set to pull out of Johannesburg, as well as Sydney and Warsaw.

alexander.ryan@legalbusiness.co.uk

Legal Business

A&O Shearman to cut partnership by 10% and close Johannesburg base in post-merger shake-up

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Legal mergers A&O Shearman

A&O Shearman is set to cut 10% of its partnership, close its South Africa office and end its consulting business, in the firm’s first major reorganisation since it completed its merger this May.

The news was announced today after the completion of what the firm described as ‘a broad strategic review’, which has ‘identified areas of overlap and overcapacity’. In a statement, the firm that it expects that global partner numbers will be now reduced by 10% by the end of the financial year.

This ‘refocus’ will ‘position the firm to continue to promote and recruit partners in the areas that enable the business to take advantage of the growth opportunities for the new firm,’ the statement continued.

The decision to close in Johannesburg comes as the office nears its tenth anniversary. According to the firm’s website, the office is home to 32 lawyers, including eight partners. The office will close by the end of the calendar year.

The firm’s consulting practice, which is now known as Consulting by A&O Shearman, will also be wound down. The consulting business was launched in 2018 after A&O identified a need to provide non-legal regulatory advice to financial services clients.

‘These reshaping measures, alongside the other strategic initiatives that we are progressively implementing, are designed to unlock the growth opportunities envisioned by our merger, setting the stage for future long-term success’, managing partner Hervé Ekué said in a statement.

‘We never take decisions like this lightly, particularly when they affect our people’, he added. ‘We are very grateful to the partners who will be leaving the firm, as well as to our teams in Johannesburg and Consulting for their contributions over the years. This is a difficult but necessary step forward. We are confident in the opportunities that lie ahead as we continue to achieve exceptional outcomes for clients and solidify our position as a new industry leader.‘

While it has been widely expected that the merger of A&O and Shearman & Sterling would result in significant job losses, it is understood that redundancies will be limited to its equity partnership, the Johannesburg office and the consulting business, with no further plans for a firmwide redundancy programme.

The firm has seen a number of high-profile departures since the May merger. In July, former private capital sector co-head Philip Bowden moved to Proskauer with acquisition finance partner Megan Lawrence. Bowden ran for senior partner at pre-merger A&O twice, losing to incumbent Wim Dejonghe in 2020 and to then-interim managing partner Khalid Garousha in 2024. Meanwhile, leveraged finance partner Vanessa Xu left pre-merger A&O for Kirkland in April.

At the same time, the firm has continued to make lateral hires, with the most recent additions coming earlier this week when it announced the recruitment of Sidley Austin private equity partners Dan Graham and Paul Dunbar in London.

alexander.ryan@legalbusiness.co.uk

 

Legal Business

Legacy Allen & Overy sees profits soar in final year pre-Shearman merger as revenue edges up

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Financial results A&O ShearmanAllen & Overy

Legacy Allen & Overy saw revenue nudge up 3.4% in the last financial year before its transatlantic merger, against a surge in profits that took average PEP to £2.2m.

A&O Shearman has announced that turnover for the legacy UK firm edged up a modest 3.4% to £2.2bn for the financial year ended 30 April 2024.

The revenue increase is significantly lower than last year’s uptick of 8%, which saw A&O cross the £2bn mark for the first time, becoming the first magic circle firm to do so. Clifford Chance joined it in the £2bn club a week later, with Linklaters only following suit a year later when it this month confirmed that its revenue hit £2.1bn in 2023-24. 

While turnover growth at legacy A&O, which formally merged with Shearman & Sterling under the A&O Shearman banner on 1 May, was modest across the last financial year, profit growth was not: the firm reported an increase in profit before tax of more than 17% to a total of £1bn. 

This increase took average profits per equity partner (PEP) to £2.2m – up more than 21% from the £1.816m reported in last year’s LB100. Last year, by contrast, A&O reported a slight dip in profit and a 6.6% drop in PEP. 

Announcing its financial results, the firm said in a statement that the results had benefitted from a strategic partnership with Inflexion for its aosphere platform. The deal, announced in October 2023, saw the PE house make a strategic investment alongside A&O and US investor Endicott Capital in the legal and compliance data platform, leaving A&O a minority shareholder.

Although legacy A&O’s revenue growth for the last financial year is well short of the 10% Linklaters reported for the same period, its topline figure remains ahead. Its PEP is also higher, with Linklaters reporting a 10.3% increase in profit and an 8% jump in average PEP to £1.9m.

The positive results for legacy A&O come after Shearman saw revenue fall 7.7% to $837m in the 2023 calendar year, against a 3.5% increase in average PEP to $2.556m. At today’s Bank of England exchange rate, legacy A&O’s PEP for 2023-24 converts to $2.823m.

Last year’s Legal Business Global 100 report showed legacy Shearman posting a 10% drop in revenue to $906.9m for the 2022 calendar year. This came alongside an even bigger decline in PEP, which fell 18% to $2.478m.

Going forward, the newly merged firm will run its financial year to 30 April, in line with the legacy UK arm.

Commenting on the results Hervé Ekué, who was elected managing partner of A&O in March and now serves as global managing partner of the merged A&O Shearman, said:

‘In the year leading up to the completion of our merger, we’re pleased to report positive growth for the firm. This is testament to our strategic focus on diversification across regions, practices, and sectors.’

alexander.ryan@legalbusiness.co.uk

Legal Business

‘Credibility in both US and English law is non-negotiable’ – A&O Shearman readies for launch

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Legal mergers A&O ShearmanAllen & OveryShearman & Sterling

As the latest edition of Legal Business went to press in late April, Allen & Overy (A&O) and Shearman & Sterling were working to a deadline of their own – the 1 May go-live date for their mega-merger.

The headline figures are undeniable – A&O Shearman will come into existence with 4,000 lawyers in 48 offices across 29 countries, as well as $3.5bn in revenue; enough to rocket it up to fourth place in the Global 100.

Legal Business

Shearman partners overlooked in Allen & Overy leadership race

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Leadership A&O Shearman

In a move that may not come as a surprise to most, Allen & Overy (A&O) has unveiled a list of contenders for the managing and senior partner roles, with no Shearman & Sterling partners in the race.

Private capital group co-chair and global banking practice co-head Philip Bowden (pictured) is among three lawyers vying for Wim Dejonghe’s crown as senior partner, alongside global projects, energy, natural resources and infrastructure board head David Lee and Abu Dhabi capital markets partner Khalid Garousha, who stepped into the role of interim managing partner in July following Gareth Price’s shock departure earlier in the month. Both Bowden and Lee are based in the firm’s London office.

Meanwhile, there are five candidates for the role of managing partner: London-based advanced legal services delivery head Angela Clist, Paris managing partner Hervé Ekué, Hong Kong managing partner Vicki Liu, New York-based global international capital markets group head David Lucking, and Brussels-based global corporate practice co-head Dirk Meeus.

‘Voting will take place in the elections for the firm’s next senior partner and managing partner in February 2024’, A&O said in its Monday statement. ‘The successful candidates will take up their posts on 1 May 2024 and serve in this capacity through 30 April 2028 for A&O Shearman, following the completion of the merger to become A&O Shearman.’

The statement continued: ‘Shearman & Sterling partners will hold very significant leadership positions globally and regionally in the combined firm, including within the firm’s executive committee, board, practice group and regional leadership.’

Continuing the theme of A&O clearly being in the driving seat of this combination, Shearman partners will not be eligible to vote.

Several of the candidates are familiar from A&O leadership elections past. Bowden ran a tight race against then-one-term incumbent Dejonghe in 2020. Both Liu and Meeus, meanwhile, ran for the managing partner role that went to Price last time around. Garousha’s decision to run will come as a surprise to some, as partners both within and without the firm have previously commented that he was not seen as someone with leadership ambitions.

The announcement is the clearest official statement yet on how the merged firm will operate. Few will be surprised to see A&O retain the lion’s share of control. It is by far the bigger firm in terms of both revenue and headcount: its turnover was $2.57bn to Shearman’s $906.9m, and it has 2,551 lawyers to Shearman’s 722, according to figures in this year’s Global 100 report. This disparity in size has led some in the market to view the merger as, in the words of one firm’s London leader, ‘more like an acquisition’. And the promise of ‘very significant leadership positions’ for Shearman’s management will do little to alter this perception.

The two firms remain separate until the merger completes, scheduled for no later than 1 May 2024 and subject to customary closing conditions and regulatory approvals. And regulatory concerns in some jurisdictions would prohibit Shearman partners from participating in the selection of leadership at A&O. However, A&O’s statement that each of the winners of the elections will stay in their respective roles in the merged A&O Shearman for their full four-year terms clearly indicates that it is the dominant party in the combination.

The announcement also puts to bed earlier speculation that Dejonghe would find a way to stay on as senior partner beyond his mandated two terms. The statement’s only mention of Dejonghe is to note that his term will end on 30 April 2024 along with Garousha’s. However, Dejonghe may yet remain close to the c-suite. Those ‘very significant leadership positions’ are unlikely to be filled entirely by Shearman partners. Market commentators remain divided on what they predict Dejonghe will do next: some believe that he will take the chance to walk away after pulling off a successful transatlantic merger, while others argue that he will stay around to help steer the merged firm through what is sure to be a lengthy integration process.

The results of the elections will be announced on 1 March 2024.

alexander.ryan@legalease.co.uk

Legal Business

ChatGPT has drunk the Kool-Aid on A&O Shearman – let’s see what it makes of Paul Weiss

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The Issue A&O Shearman

So much ink has been spilled over game-changing developments in recent weeks – namely the partnership vote in favour of the A&O Shearman deal, and Paul Weiss’ assault on the talent pools of the Square Mile – that it can be difficult to find an angle that isn’t hackneyed to within an inch of its life.

Nevertheless, a ring around senior contacts for a different take paid dividends, even if some of the suggestions are more about playing devil’s advocate and mischief-making.

Legal Business

Partners vote yes on A&O Shearman – now they have to make it work

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Legal mergers A&O Shearman

‘You’ve now got one more 64,000lb gorilla,’ said one former UK firm leader, in response to the news that the merger of Allen & Overy (A&O) and Shearman & Sterling will proceed.

On 13 October, the firms announced the end of partnership voting on the combination, with more than 99% of votes cast at each firm in favour. The firms are due to combine as A&O Shearman from May 2024 at the latest, creating ‘the first fully integrated global elite law firm’, with nearly 4,000 lawyers across 48 offices in 29 countries.

Legal Business

A&O Shearman is a marriage of necessity, not convenience

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Pritchard A&O Shearman

The most enjoyable part of analysing the proposed merger of Allen & Overy (A&O) and Shearman & Sterling has been hearing the reactions of leaders at peer firms to the video featuring senior partners Wim Dejonghe and Adam Hakki.

Hot-takes from around the City have been often amusing. Says one US firm leader: ‘It’s clearly not a merger, is it? It’s a takeover of Shearman by A&O, isn’t it?’ And it certainly does feel like A&O’s Dejonghe is in the driving seat of what is undeniably a slick pitch, even if it does, at times, look like Hakki is in a hostage situation.

Legal Business

Departures from Shearman and Allen & Overy as merger is unveiled and energy dominates lateral hiring

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Legal mergers A&O ShearmanAllen & OveryShearman & Sterling

Following the announcement of the proposed A&O Shearman merger, news came that Shearman & Sterling had lost two partners to Ashurst in London, which leads the headline moves – dominated by energy and infrastructure hires – in recent weeks.

London-based Shearman partners Sanja Udovicic and Julia Derrick moved over to Ashurst to expand the firm’s global energy team.

Legal Business

Getting its mojo back: How A&O Shearman could redefine the Magic Circle

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Legal mergers A&O ShearmanAllen & OveryShearman & Sterling

The proposed merger of A&O and Shearman & Sterling has got the market talking about the biggest news in the legal industry for decades. LB finds commentators sanguine on the deal – but management will have much work garnering partner support this summer ahead of the vote.

‘Allen & Overy and Shearman & Sterling to create the first fully integrated global elite law firm,’ proclaims the 21 May joint statement from the two firms, stating their intent to merge to create Allen Overy Shearman Sterling. Thankfully, the branding gurus also came up with the far snappier (and not quite so ampersand-devoid) A&O Shearman, ‘for short’. The combined firm would boast 3,900 lawyers across 49 offices and roughly $3.4bn in combined revenues.