Partners at Herbert Smith Freehills (HSF) and US firm Kramer Levin have voted in favour of their landmark merger, paving the way for the creation of a financially integrated $2bn transatlantic powerhouse.
The union was confirmed today (4 April) following a partner vote, and will see the pair combine as Herbert Smith Freehills Kramer.
In a statement, HSF senior partner and chair Rebecca Maslen-Stannage hailed the merger as ‘a historic and long-term commitment from both firms to pursue our future together as one combined firm’, with global CEO Justin D’Agostino describing it as a ‘major milestone’, adding that the new firm’s ‘combined offering, global reach and scale means we will be able to deliver more effectively for our clients.’
The deal cements HSF’s longstanding ambition to expand in the US, a central goal of its 2022 growth strategy. Based on 2023-24 revenues, the merged firm will sit within the top 20 globally, housing over 2,700 lawyers, including some 640 partners across 25 offices worldwide.
Roughly 120 of those partners are in the US, instantly gifting HSF, which made US expansion a central plank of its 2022 growth strategy, a larger presence than most of its UK peers.
The partner ballot opened on 24 March, with HSF holding partner briefings about the union in its offices around the world between 26 March and 1 April. The firm needed to secure the vote of at least 75% of partners in order for the deal to go ahead.
The two firms announced their planned merger on 11 November last year, stating at the time that the deal was expected to go live on 1 May. However, the firm has now announced that completion of the combination is expected to take place on 1 June.
At the time the deal was announced, HSF CEO Justin D’Agostino (pictured) hailed the proposed merger as a ‘winning trifecta,’ highlighting: ‘global disputes and global transactions on day one, a high-quality US law firm, and alignment over ambitions for growth.’
He continued: ‘Our twin engines of transactions and disputes set us in a different category of firm. We’ll be very strong in disputes globally, very strong in transactions globally, and then you add the investment,’ D’Agostino said.
HSF currently has a small, disputes-focused office in New York, while Kramer has nearly 300 lawyers in Manhattan, as well as bases in Washington DC, and Silicon Valley, with a base in Texas already on the growth agenda.
The combined firm also plans to bolster its private equity practice in New York, expand its bankruptcy capabilities to align with Kramer Levin’s top-tier US reputation, and strengthen its class actions, antitrust, and tech-sector practices, particularly in Silicon Valley.
While the geographic reach of both firms means that, unlike A&O Shearman, there is little office duplication, the exception was Paris, with the spinoff of Kramer Levin’s Paris office – which has now joined Morgan Lewis – taking place before the merger vote.
A number of other Kramer Levin partners have also opted against joining the combined firm. Earlier this week, Hogan Lovells confirmed the hire of four Kramer Levin litigation partners in Washington DC – Gary Orseck, William Trunk, Jennifer Windom, and Matthew Madden. Orseck and Windom were co-managing partners of the US firm’s DC office; Orseck also chaired the litigation practice, while Windom was co-head of the healthcare practice group.
Partners at rival firms told LB that the hard work comes now with integration. ‘They have a lot of work ahead of them – particularly around attracting clients and creating a solid business rationale for why clients should engage with them,’ said one London managing partner.
Another senior figure with transatlantic merger experience warned that this will take ‘time and effort,’ ‘they’ll need to ensure both firms align culturally, that their strategies mesh, and that the integration process works smoothly.’
However others stressed the advantage the deal gives HSF over UK peers. It gives them ‘a distinct advantage,’ said one recruiter. ‘People will now be looking at firms like Simmons & Simmons and Ashurst, who haven’t yet made similar moves.’
The merger also sets the stage for further US-UK tie-ups. ‘This could actually make it easier for other international firms to negotiate full mergers with mid-sized US firms, something that would have been much harder even five years ago,’ noted one law firm leader. ‘Larger US firms might start looking for merger candidates as well, realising that waiting may not be in their best interest.’
