In a statement issued yesterday, Allen & Overy said: “We have concluded our discussion with Allen & Gledhill on a proposal for an alliance or combination between the two firms. As a result both parties have agreed not to proceed.”
Allen & Gledhill would remain a “leading independent Singapore firm,” managing partner Lucien Wong said in a separate statement.
“Our strategy of maintaining our market leading position in Singapore and being a leading law firm in South East Asia has not changed, and we are confident of pursuing this strategy without being in an alliance with, or being part of, an international law firm,” he said.
The tie-up talks between the two firms had shaken the Singapore legal market when they first became public last November. Allen & Gledhill is Singapore’s leading corporate law firm by a considerable margin. Moreover, at the time it began talks with Allen & Overy, Allen & Gledhill had already been in a joint law venture with another Magic Circle firm, Linklaters, for over a decade.
That non-exclusive JLV is now coming to a close as well. In a joint statement, also issued yesterday, the firms said they had reached an amicable agreement to end their JLV.
“The firms have enjoyed a long-standing and successful joint venture in Singapore for some 11 years and have great respect for each other’s experience, expertise and people,” the firms said in their statement. “We expect to work together for mutual clients in accordance with their preference outside the JLV but both firms now wish to pursue different strategic directions in the dynamic South East Asian region.”
A combination between Allen & Overy and Allen & Gledhill would have created a legal giant in Asia. Allen & Gledhill, until last year, was the largest firm in Singapore with over 300 lawyers. Meanwhile Allen & Overy has over 2,600 lawyers and has offices in 27 countries. The firm also holds a Qualifying Foreign Law Practice license, which allows it to practice local corporate law in Singapore. Foreign firms can otherwise only practice Singapore law through JLVs.
A tie-up between the two firms would have faced major hurdles though. Top Singapore firms are significantly less profitable than those of the Magic Circle, making financial integration a challenge. Closer ties to Allen & Overy might have cost Allen & Gledhill referral work from other international firms.
Last month, the Singapore Parliament enacted legislative changes that would clear the way for partial mergers between foreign and domestic law firms. The reform was largely seen as a sign of government support for a tie-up between Allen & Overy and Allen & Gledhill. A number of Singapore firms have said privately they may combine with international firms.
Wong seemed to leave the door open for a future deal in his statement. “We will continue to review strategic options to enhance our position in Singapore and Asia,” he said.