The Rise in Transatlantic Law Firm Mergers

This week, UK-based law firm Taylor Wessing announced that it had entered into merger talks with US-based firm Winston & Strawn. The proposed deal seeks to create a unified global firm with over 1,400 lawyers and estimated revenues of $1.75 billion.

This follows Ashurst’s November announcement of its intention to merge with US firm Perkins Coie. Further recent UK-US mergers include Herbert Smith Freehills’ merger with Kramer Levin, as well as Allen & Overy’s 2023 merger with Shearman & Sterling. Taken together, these developments suggest a growing trend in transatlantic consolidation, as leading national firms increasingly prioritise size and cross-border expertise. A primary rationale for these mergers is that firms are responding to heightened external competitive pressure to access new markets. Analysts from Bloomberg have observed that for large UK firms, access to the US market is increasingly becoming a necessity rather than a bonus, with those that fail to do so at risk of being “left behind”. Internally, client demand is also a key driver. Ashurst’s chief executive, Paul Jenkins, has stated that clients are asking for increased depth of capability in the US. Through such mergers, firms can demonstrate greater cross-border expertise to entice both current and prospective clients. Such mergers may also reflect longer-term technological strategies. Bill Malley, UK managing partner of Perkins Coie, stated that a larger firm would make it easier to recruit technology specialists who could help lawyers make better use of AI in their work.

However, such mergers are not without risk. Commentators have noted longstanding challenges in UK-US mergers, particularly due to incompatible pay systems and cultural differences. This highlights the need for merging firms to overcome significant initial integration barriers to ensure long-term success. The Ashurst–Perkins Coie merger will reportedly bring together approximately 3,000 lawyers across 52 offices in 23 countries, highlighting the scale of this challenge. Additionally, political and regulatory risks may vary
significantly across jurisdictions, necessitating that firms carefully evaluate the broader implications of transatlantic expansion.

Looking ahead, announcements of further high-profile transatlantic mergers appear increasingly likely. Reuters analysts suggest that rising operational costs, modest demand growth, and competitive pressures are making UK-US mergers an attractive long-term strategy. Such mergers can be financially lucrative, as illustrated by A&O Shearman’s reported revenues of $3.7 billion post-merger. However, law firms considering any merger should not be driven by competitive pressure alone. Ultimately, they must ensure any merger is the right fit, weighing up implementation challenges alongside political and regulatory
hurdles.

Sources: FT, Reuters, Bloomberg

Writer: Steven Collingham
Editor: Méy Fekri