Legal Business

A&O’s Wim Dejonghe on mergers, money and his plans for life after law

I wanted to go into sports. I was a sailing instructor, close to professional. But then I had knee issues, so I needed to change my plans last minute. I still do a lot of exercise, but I hate the gym. That’s how I relax, reflect, enjoy myself, and get energy. I do a lot of sport with my sons, who are all into sailing, biking, jogging, and skiing. I can still keep up with them on the bike, but in skiing I have no chance!

I never planned to be a lawyer. When I started my law course I focused on international public law – the United Nations, NATO and international treaties. I wanted to be a diplomat but there are two issues with being a diplomat in Belgium: one is that you need political connections, and the other is that you’re not so relevant in the international diplomatic community. I worked as an assistant professor at a university but found it a bit too quiet. So, I decided to do a trainee internship as a lawyer, and never stopped. At the time I went into law, we were still obliged to do military service. I did six months in a law firm while I was waiting to get called up, then I went back to the firm after my time in the army, and technically I haven’t changed firms since. It wasn’t by design – it was more the elimination of other options.

Legal Business

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

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

Allen & Overy returns to Milbank for City restructuring hire

Allen & Overy has hired its second partner from the London arm of Milbank so far this year, bolstering its restructuring practice with the addition of partner Karen McMaster. 

Recognised as a leading individual in The Legal 500, McMaster leaves Milbank after six years at the US firm.

Her experience includes advising on debt restructuring and reorganisation matters, in addition to advising buy side and distressed investors with investments in distressed, stressed or special situations. 

McMaster’s recent mandates include acting for an ad hoc group of secured creditors in the Irish Scheme of Arrangement of Nordic Aviation Capital, and its later reorganisation through a Chapter 11 bankruptcy process. She also acted for a group of noteholders in the restructuring of Luxembourg-incorporated industrial group Galapagos. 

News of her recruitment comes shortly after A&O, which will combine with Shearman & Sterling on 1 May, hired structured finance partner John Goldfinch from Milbank in February. Goldfinch was joined by four Milbank associates: Adrian Kwok, Peter West, Eleanor Cripps and Alexandra Wells. 

McMaster’s departure also marks the second from Milbank’s City restructuring team this year, after Jacquie Ingram moved over to Akin in January. Like McMaster, Ingram spent six years at Milbank and had previously worked with her at both Cadwalader and Linklaters. 

A&O Shearman is set to become one of the biggest firms in the world when it launches, with combined revenues of roughly $3.5bn and some 4000 lawyers worldwide. The firm  released details of its new leadership team.  A&O’s interim global managing partner and Middle East and Turkey regional managing partner Khalid Garousha has been elected senior partner of the combined firm, with Paris managing partner Hervé Ekué becoming global managing partner. 

Two roles were also announced for Shearman leaders: current senior partner Adam Hakki will become co-chair of A&O Shearman’s board and executive committee and chair of the firm’s US business, while current global managing partner Doreen Lilienfeld will serve as co-managing partner of the merged firm’s US business.

Legal Business

A&O high yield head retires ahead of Shearman tie-up as firm makes first combined partner promos

Prominent high-yield partner Kevin Muzilla has retired from Allen & Overy, in the latest departure from the practice ahead of next month’s A&O Shearman mega-merger.

Ranked in the Legal 500 Hall of Fame for London high-yield, Muzilla joined A&O from Milbank as a partner in 2009, and has since headed up the firm’s leveraged finance teams, first the US and then Europe.

He has been active in the European high yield market since its inception, and has been involved in many market-defining deals, including advising the
underwriters on what was the largest Russian LBO financing in history
– the acquisition of Russian transportation group FESCO, which won the Legal Business Finance Team of the Year award in 2014.

His departure follows that of Marwa Elborai, also a Legal 500 high-yield leading individual, who left for Kirkland & Ellis last month after joining from Shearman in late 2022, while fellow high yield grandee Ward McKimm recently confirmed he would be retiring from Shearman ahead of the 1 May combination with A&O.

Another high yield specialist partner, Jeanette Cruz, also left A&O last August, according to filings on Companies House.

A&O said in a statement: ‘We would like to thank Kevin for the contribution that he has made during his time at A&O and wish him all the best for the future.’

A&O’s London high-yield bench is by no means totally depleted. Prominent partners remaining include US-qualified John Kicken, who joined in 2014 from Cravath, and Brad Weyland, who came in as a partner in 2021 from Latham & Watkins, where he was a counsel.

The magic circle firm is currently gearing up for the completion of its combination with Shearman; a deal which is of driven in large part by complementary finance expertise at both firms. Shearman’s London office includes Legal 500 high-yield leading individual Trevor Ingram and next generation partner Gordon Houseman, who made partner at the US firm in 2015 and 2021 respectively.

Elborai’s departure to Kirkland was followed last week by the news that A&O debt finance partner Vanessa Xu, who was made up in 2017, would also be joining the US firm’s London office.

However, these departures are to be offset by the first combined round of partner promotions at A&O Shearman, with 40 new partners announced in a joint press release issued today (8 April).

Of these, 32 come from A&O and eight from Shearman. This balance was ‘consistent with the relative size of the two firms and their geographic footprints’, the press release said, with A&O’s 80% share in line with its 78% share of the merged firm’s total headcount, according to data from last year’s Global 100. Last year A&O promoted 36 partners with 12 in the UK, while Shearman promoted ten, with one in the UK.

All nine of the new London partners came from A&O, with three each in banking and corporate. Thirteen have been made up to partner in the US, including five from A&O and eight from Shearman. The total also included 13 new partners in continental Europe, four in Asia, and one in the Middle East, all of which were from A&O.

Banking was the biggest overall practice area with ten promotions all from A&O. Corporate was in second with nine, including eight A&O corporate partners and one Shearman M&A partner. The new partners also included six in litigation, five in international capital markets and four in tax.

Full list of partner promotions:

Allen & Overy

New York
Lena Kiely, International Capital Markets
Puja Patel, Corporate
Derek Poon, International Capital Markets

Washington DC
Michael Sykes, Banking
Gideon Wiginton, Banking

Tim Bates, International Capital Markets
Imogen Carr, Corporate
Vanessa Morgan, Management
Rebecca Noble, Banking
Rachel O’Reilly, Banking
Kate Pumfrey, Litigation
Alex Shandro, Corporate
Jason Symington, Banking
David Weaver, Corporate

Axel de Backer, Banking

Luke Whibley, Banking

Laurie-Anne Ancenys, Corporate
Charles del Valle, Tax
Anne-Caroline Payelle, Corporate

Catharina Glugla, Corporate

Rauni Ahammer, Banking

Tim Drach, Tax
David Schmid, Litigation
Sebastian Schulz, Litigation

Baptiste Aubry, International Capital Markets
Franz Kerger, Tax
Madrid, Spain
Ishtar Sancho, Tax

Arash Koozehkanani, Litigation

Mohammad Andrew, International Capital Markets

Matthew Del Rosso, Banking
Jessica Lee, Banking
Ayesha Thapar, Corporate

Shearman & Sterling

New York
Melisa Brower, Compensation, Governance and ERISA
Jonathan Cheng, Antitrust
Joshua Ebersole, Litigation
Jai Garg, Compensation, Governance and ERISA
Christopher Glenn, Mergers & Acquisitions
Leila Siddiky, Litigation

Washington DC
Brian Hauser, Antitrust

Michelle Kwan, Emerging Growth

The promotions are broadly balanced along gender lines, with 23 men (57%) and 17 women made up.

Legal Business

London partners overlooked as A&O Shearman reveals post-merger leadership

Allen & Overy and Shearman & Sterling today announced (1 March) the names of the key leadership term that will head A&O Shearman once the $3.5bn merger completes on 1 May – with no UK-based partners making the line-up.

A&O’s current interim global managing partner and Middle East and Turkey regional managing partner Khalid Garousha has been elected senior partner of the combined firm. The managing partner role, meanwhile, has gone to current Paris managing partner Hervé Ekué.

Two roles were also announced for Shearman leaders: current senior partner Adam Hakki will become co-chair of A&O Shearman’s board and executive committee and chair of the firm’s US business, while current global managing partner Doreen Lilienfeld will serve as co-managing partner of the merged firm’s US business.

It is unclear what these appointments mean for A&O’s current US co-chairs Kent Rowey and Karen Seward. The New York duo, a projects partner and an employment partner respectively, took over from outgoing chair Tim House less than a year ago, on 1 May 2023.

‘I am honoured that the partnership has put its trust in me to lead A&O Shearman as its first senior partner’, said Garousha in a statement. ‘Working closely with Hervé, Adam, Doreen, and other senior leadership, as A&O Shearman we will take forward our combined expertise and deep legal knowledge to achieve unparalleled outcomes for our clients on their increasingly complex legal and commercial challenges, wherever they and we operate in the world.’

Hakki was similarly effusive: ‘I am honoured and excited to be taking on these senior leadership roles for A&O Shearman. I am very much looking forward to working closely with our soon-to-be new partners and leadership team to deliver on our shared vision for an unparalleled global elite firm, centered on providing the highest level of service to clients in their most important matters worldwide. I am also pleased that these leadership roles have been designed to allow me to both serve the firm as a leader and actively represent clients in their most significant matters.’

The statement also says that: ‘Additional senior and other leadership appointments for the new firm will be drawn from both firms and announced in due course.’

The announcements of Hakki and Lilienfeld’s roles close the open questions about how much leadership authority would go to Shearman, often viewed as the junior partner in the merger, with $906.9m in revenue in last year’s Global 100 compared to A&O’s $2.57bn.

Garousha’s election can be seen as a vote for continuity. Outgoing senior partner Wim Dejonghe is set to come to the end of his second and final term on 30 April. Some in the market argued that managing partner Gareth Price, eligible to serve another term after first winning election in 2020, would stand for reelection this year as a continuity candidate. But Price resigned for personal reasons last July. Garousha then stepped into his role on an interim basis.

Garousha’s victory may come as a surprise to many in the London market. This is not due to a lack of status: partners at other firms with knowledge of A&O have described him variously as ‘incredibly well respected’, ‘uniquely talented’, and ‘a class act’. His loyalty to and knowledge of A&O were also well-regarded: he joined the firm from CMS in 2000 and made partner in 2004.

However, few viewed him as a figure with firmwide leadership ambitions. Indeed, some speculated that this perception made Garousha a good choice for interim managing partner with the role due to be contested soon, and reacted with surprise when his name was announced among the senior partner candidates.

Moreover, Abu Dhabi-based Garousha was the only candidate for the role not based in London. He beat both global projects, energy, natural resources and infrastructure board head David Lee and private capital group co-chair and global banking practice co-head Philip Bowden to step into Dejonghe’s shoes. Bowden also ran for senior partner in 2020 – and lost narrowly to then-first-term incumbent Dejonghe. Some have also argued that, as a capital markets partner, Garousha’s practice is further from the core of A&O’s identity than Bowden and Lee’s focuses on banking and finance.

Of course, part of the merger integration process will inevitably involve changing A&O’s identity. Few doubt that finance remains at the core of what the merged firm will try to achieve in its new transatlantic form. But if A&O was seeking to break market perceptions of it as a UK firm, a Magic Circle standard bearer, and reorientate it with the ‘global elite’ status that it and its peers aspire to, naming a new leadership team based entirely outside of London would be one way to do it.

Ekué, meanwhile, is another near-lifer, at A&O in Paris since 2001 with just one year at Clifford Chance before that. He won the role after defeating London advanced legal services delivery head Angela Clist, Hong Kong managing partner Vicki Liu, New York global international capital markets group head David Lucking, and Brussels global corporate practice co-head Dirk Meeus.

There is more continuity on the Shearman side. Hakki only took over from David Beveridge as senior partner a little less than a year ago, after Shearman’s prospective combination with Hogan Lovells fell apart in early March. But he was crucial in coordinating with Dejonghe to get the A&O merger done – a process that took place over a period of mere months before a public announcement last May that reportedly came as a surprise to not just the legal press but partners at both firms.

Last word in the announcement went to Dejonghe. ‘A&O Shearman will bring together some of the greatest legal talent in the world while maintaining a focus on clients, our people and wider society’, he said. ‘I’m delighted to pass the leadership baton to Khalid, Hervé, Adam and Doreen on May 1, and I wish them all every success in their new roles at A&O Shearman.’

Legal Business

Allen & Overy dodges data leak bullet as firm tight-lipped on ransom outcome

As the deadline for Allen & Overy (A&O) to pay a multimillion dollar ransom on its data passed by without incident on 28 November, the firm declined to comment on whether it had paid the cyber criminals off.

On 9 November A&O said it had suffered a ‘data incident’. Posts from X user and self-described ‘threat intelligence platform for cybersecurity’ @FalconFeedsio on Wednesday 8 November suggested that notorious cyber criminal group LockBit had targeted the firm, with a threat to release ‘all available data’ by 28 November.

Legal Business

Allen & Overy suffers ‘data incident’ as ransomware group LockBit claims responsibility

Allen & Overy has confirmed that it has suffered a ‘data incident’. Posts from X user and self-described ‘threat intelligence platform for cybersecurity’ @FalconFeedsio on Wednesday 8 November suggested that cybercriminal group LockBit had targeted the firm, with a threat to release ‘all available data’ by 28 November.

‘We have experienced a data incident impacting a small number of storage servers’, said an A&O spokesperson. ‘Investigations to date have confirmed that data in our core systems, including our email and document management system, has not been affected.

‘The firm continues to operate normally with some disruption arising from steps taken to contain the incident.’

The firm claims that the incident is under control: ‘Our technical response team, working alongside an independent cybersecurity adviser, took immediate action to isolate and contain the incident. Detailed cyber forensic work continues to investigate and remediate the incident.

‘As a matter of priority, we are assessing exactly what data has been impacted, and we are informing affected clients. We appreciate that this is an important matter for our clients, and we take this very seriously. Keeping our clients’ data safe, secure, and confidential is an absolute priority.’

A&O declined to comment further. The firm did not respond to requests to confirm LockBit’s involvement.

In June, GCHQ’s National Cyber Security Centre (NCSC) issued a joint advisory alongside agencies from the United States, Australia, Canada, France, Germany, and New Zealand stating that LockBit was ‘almost certainly the most deployed ransomware strain in the UK and that it continues to present the highest ransomware threat to UK organisations.’

LockBit hit Royal Mail with a ransomware attack in January and leaked Royal Mail’s data on 23 February after Royal Mail refused to pay both an initial ransom demand of £66m and a subsequent demand for £47m. The cybercriminal group also announced that it had hit Boeing in late October. Boeing confirmed the cyberattack in early November and was re-added to LockBit’s list of victims on 7 November after disappearing from the list on 30 October, according to FalconFeeds.

The SRA in June 2022 issued a risk outlook report entitled ‘Information security and cybercrime in a new normal’. In the report, it noted that ‘increased dependence on IT’ since the Covid-19 pandemic ‘creates more opportunities for cybercriminals.’

A&O is not the first major firm to suffer from a data breach. DLA Piper was shut down by a cyberattack in 2017. And in June, ransomware group CL0P posted the names of Kirkland & Ellis, K&L Gates, and Proskauer Rose to its leak site, although none of the firms responded to requests for comment.

BCLP, meanwhile, discovered it had been hacked in late February, in a breach that exposed the personal data of more than 50,000 current and former employees of client Mondelēz International. In June, a class action suit was filed against BCLP in the Northern District of Illinois. The case remains ongoing. BCLP did not respond to requests for comment.

‘These [data breaches] are causing a tremendous amount of harm’, said Thomas Zimmerman, an attorney at Chicago-based Zimmerman Law Offices, which is bringing the class action against BCLP. ‘Clients I represent who have had data stolen have dealt with loans being opened up in their names, their credit score hijacked, mortgages opened up in their names for homes. And they’re stuck with it, you can’t change a social security number like you can open a new bank account, people suffer the consequences for years.’

There has never been a data breach group action litigated in an English court. The prospects for bringing such a claim are complicated by the fact that opt-out claims can currently only be brought in England at the Competition Appeals Tribunal (CAT). And many in the market are sceptical that a data breach claim could be adequately formulated as a competition claim.

The A&O data breach was first reported in the Financial Times.

Legal Business

It’s a ‘yes’ from them – A&O and Shearman partners vote through landmark $3.5bn transatlantic deal

Allen & Overy (A&O) and Shearman & Sterling are set to go ahead with their transatlantic merger, after partners at both firms voted overwhelmingly in favour of the union, with support from more than 99% of votes cast at each firm.

The pair is expected 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 and 29 countries.

With combined revenue of roughly $3.5bn, the merged firm will sit comfortably within the top five of the LB global 100 – behind Kirkland & Ellis, Latham & Watkins and DLA Piper.

Partner voting on the combination kicked off on 28 September, and was scheduled to run until 13 October, with the firms needing to secure the approval of 75% of partners to get the deal over the line.

Announcing the move, A&O senior partner Wim Dejonghe (pictured) said: ‘This is a historic moment for both firms and our profession. We are delighted that our partners have voted so resoundingly in favour of this merger, which is a transformational step for the legal industry. We have long admired Shearman & Sterling for its outstanding reputation, talent, and client base, and we are confident that together we will create a truly exceptional global firm that will serve our clients’ needs in an increasingly complex and dynamic world.’

Shearman senior partner Adam Hakki added: ‘Our partners have recognized and welcomed this unparalleled opportunity to combine our individual market leadership and brands to serve clients as an integrated global law firm, preeminent in all our markets. A&O Shearman will be a firm unlike any other in the world, built to achieve exceptional outcomes for our clients through an intentional focus on quality, excellence, and collaboration. We are creating a new industry leader, with truly global capabilities, and we are excited for what is to come.’

The firms announced they were in merger discussions in May this year and the deal had been widely expected to go ahead, with management at both firms embarking on a series of roadshows around the world over the summer to shore up support.

The combination marks the first transatlantic merger involving a Magic Circle firm since Clifford Chance’s ill-fated union with Rogers & Wells in 2000 and comes after A&O held unsuccessful talks with O’Melveny & Myers in 2019.

Shearman, meanwhile, was engaged in talks with Hogan Lovells as recently as this year, with the pair announcing the end of discussions in March. The firm has struggled to keep pace with New York rivals in recent years. With its traditional banking client-base, it has not made the same push into private equity as its rivals, something management at the combined firm is keen to rectify.

Shearman has also been hit by partner exits around the world, including finance partners Philip Stopford and Korey Fevzi, who left in March this year to launch the English-law offering at Cravath, Swaine & Moore in London. The firm named respected litigator Adam Hakki as the senior partner successor to David Beveridge the same month.

Market reaction to the deal has been largely positive. Jomati founder Tony Williams, who was previously managing partner at CC before its US merger, commented: ‘A&O was lucky. The previous discussions with O’Melveny made partners understand how difficult getting a US deal is. The partners were more amenable to compromise on issues that, if not for that experience, might have been sticking points.’

Another commentator noted: ‘It’s been handled extremely well. Both firms have had failed merger attempts recently. Both sides understood the importance of managing communications – even simple things like who gets informed in what order. Communications strategy is crucial and has been really well handled. The whole thing was presented as a proper corporate deal.’

The deal will heap pressure on the remaining magic circle firms to come up with credible offerings of their own in the US. There has not been a significant UK/US merger since 2018, when BCLP was created. This deal came after Eversheds Sutherland was formed in 2017, while Norton Rose Fulbright happened in 2013 and Hogan Lovells in 2010.

As Williams commented: ‘It’s transformative in one key respect: it is a fundamental shift in what the top UK firms have been able to achieve in the United States.’

‘You’ve now got one more 64,000lb gorilla, with a unique capability that doesn’t really exist elsewhere’ adds a former UK firm head. ‘A&O Shearman now has a capability that the other Magic Circle firms don’t have. These things don’t change overnight – no one will be out of business all of a sudden. But over time, over around 10 years, it could be transformative. It’s like a snowball. It gathers momentum. It’s really a challenge for the [rest of the] Magic Circle.’

Maurice Allen, founder of legal consultancy LTN & Partners, argued that in addition to the direct benefits from the merger itself, the merged firm will also be a more attractive proposition for other lawyers, potentially making it easier to further build on the corporate side: ‘It’s a big leg up for clients and for recruitment. There’s no doubt A&O is more attractive now.

‘For people sitting in London, either at a US firm where they’re not enjoying life, or at a UK firm where they feel they aren’t reacting to the challenge of the US firms, A&O Shearman starts to look very attractive.’

Legal Business

A&O Shearman merger vote to kick off this month as pensions issues overcome

Allen & Overy and Shearman & Sterling today (18 September) announced that their respective partnerships will start voting on their proposed merger on 28 September, with the voting window to close on 13 October and results announced soon after. For the merger to be voted through, 75% of the partnerships will have to vote in favour of the deal.

‘Over the past few months, partners and teams from both firms have been meeting and building relationships, and the excitement about the opportunities for the merged firm is palpable’, said A&O senior partner Wim Dejonghe (pictured) in a statement.

‘We have made significant progress since announcing the combination, and our clients have expressed enthusiasm for the combination and for what A&O Shearman will be able to deliver’, agreed Shearman senior partner Adam Hakki. ‘Our partners and colleagues are very much supportive and eager to launch the combined firm.’

Over the summer, Dejonghe and Hakki made several ‘roadshow’ trips to many of the two firms’ offices around the world to field questions from partners and to bolster support for the combination.

Now, the two firms also report ‘the successful completion of a number of key transaction milestones’, including financial and operational due diligence and ‘the filing of requests for antitrust clearances’. Crucially, the statement also confirms ‘the completion of approval for all required modifications to retirement and pension programs.’

Many in the market saw Shearman’s pension liabilities as the biggest potential sticking point for the merger, and they are widely considered to have been the issue that caused Hogan Lovells to walk away from its own mooted combination with Shearman in March.

Comments in September from Hogan Lovells’ chief executive Miguel Zaldivar did little to dispel this perception: ‘We are not interested in deals that come with significant pension obligations, debts, or firms that have experienced a drop in revenue, talent, or partners.’

A&O has continued a spate of hiring activity in the months since the merger was announced, in particular in the US, though it did see some losses in other regions. The firm also faced some disruption with the shock resignation in July of managing partner Gareth Price, ‘for personal reasons’, with Abu Dhabi capital markets partner Khalid Garousha named as interim managing partner two weeks later.

Shearman, meanwhile, has faced a steady trickle of partner departures, including in July the loss of five partners in one week across its London and Washington DC offices.

Few in the market view these departures as cause for concern, however, and most accept that some level of rationalisation is a natural part of a merger of this scale.

The two firms themselves remain optimistic. The official announcement notes that ‘all transaction milestones have been met thus far and support for the combination among clients, partners, and colleagues has been overwhelmingly positive worldwide.’

With the pension issue put to bed, this confidence may prove well-founded.

Legal Business

A&O names Garousha interim managing partner ahead of Shearman merger vote

The board of Allen & Overy has chosen Abu Dhabi capital markets partner Khalid Garousha (pictured) as interim global managing partner as the dust has started to settle on the shock resignation of Gareth Price.

The move, announced today (27 July), came after senior partner Wim Dejonghe covered the role since the firm on 13 July announced Price’s departure for ‘personal reasons’ at the same time as releasing its financial results.

Garousha, who will remain as regional managing partner of the Middle East and Turkey, will take on the global managing partner role on 1 September and will serve until 30 April 2024.

‘Khalid is ideally suited to take up the role’, said Dejonghe in a statement. ‘I would like to thank him on behalf of the firm for his commitment and leadership. I look forward to working closely with him to continue delivering on our strategic aims, staying focused on our clients and people and holding the proposed merger vote by the end of October.’

The move comes at a time of great upheaval for A&O. In addition to the proposed tie-up with Shearman & Sterling, the firm has leadership elections scheduled for early next year, with Dejonghe’s second term as senior partner set to come to an end.

Commenting on his appointment, Garousha said: ‘It is a privilege to be asked by the board to take up this role. Wim and I will work together during this exciting time to continue growing our firm and to deliver excellent service to our clients.’