Legal Business Blogs

HSF strategy review puts US merger and new office launches on the agenda

Herbert Smith Freehills (HSF) is accelerating its US development plans, launching consultations to explore a US merger and office openings outside of New York.

The performance of HSF’s New York office has exceeded early expectations after landing a number of large white-collar investigations and helping to win the firm a role advising JP Morgan Chase on the Asia end of the Securities and Exchange Commission (SEC)’s probe into whether the bank hiring the offspring of powerful Chinese officials helped it to win work in the country, as US regulators ramp up their checks on New York-based investment banks’ activities in Asia.

The consultations, launched in November 2014, have already resulted in external consultants being drafted in to explore a potential merger with one US firm, though those discussions are no longer on-going. However, one partner involved in the consultations told Legal Business that external advisers will not take part in the firm’s wider review of its US strategy: ‘We will not get a consultant to tell us what to do in the US. We will decide.’

The review will also explore expanding HSF’s range of practices in New York, with the firm having focused its initial effort around its renowned disputes group.

The New York office launched with a six-litigator hire from Chadbourne & Parke in September 2012 and has since expanded to 11 partners, with the return of arbitration specialist Laurence Shore from Gibson, Dunn & Crutcher in February 2013, and the hire of Cooley’s head of investigations and financial services litigation, Scott Balber, a year and a half later.

Sonya Leydecker (pictured), co-chief executive of HSF, is leading the review after spearheading the New York launch during her time as global head of disputes. Leydecker told Legal Business: ‘We are continuing to look for lateral hires. We are very keen to grow and enhance the offering. There are areas where we want additional capability in New York.’

One of the firm’s key targets, whether through a merger or a new office opening, is to expand its footprint into Washington DC, given it is home to the US Department of Justice (DoJ) and the firm’s aggressive push into the investigations space and longstanding reputation for antitrust work. That goal has become even more vital as the DoJ and the SEC link up with increasing frequency.

If Freshfields Bruckhaus Deringer was well placed in Washington DC in the 2000s, with its renowned arbitration team benefiting from the deluge of claims against Latin American states at the Washington DC-based World Bank arbitration court HSF’s leadership is hopeful that with an office in the capital, its Asian disputes practice will enable the firm to pick up more US-led investigation work. The firm is currently representing a Russian uranium transport company in a DoJ investigation.

One partner adds: ‘There’s not just one project and one initiative. They are rolling. No-one thinks the US is a one-hit project.’