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Mayer, Brown & Platt has acquired 250-lawyer London firm Rowe & Maw in the largest American acquisition of a U.K. law firm to date. When the merger becomes effective Feb. 1, the combined firm, to be known as Mayer, Brown, Rowe & Maw, will have the largest London office, 270 lawyers, of any U.S.-based firm. The next-largest American firm in London is Dechert. “London is essential,” said Mayer Brown chairman Ty Fahner in a written statement. “Its importance to the practice of law in the 21st century cannot be overstated.” London will replace the 175-lawyer New York office as the firm’s second-largest office. The firm has 550 lawyers in its Chicago headquarters and a firmwide total of 1,300, including Rowe & Maw. As globalization has progressed in recent years, almost all major American firms have sought a presence in the European financial capital, and British firms have increasingly sought American partners. The biggest transatlantic combination to date remains the 2000 merger between London’s Clifford Chance and New York’s Rogers & Wells. Within the British legal community, Rowe & Maw is considered a solid, middle-market firm, said Giles Rubens, a director with law firm consulting firm Hildebrandt International’s London office. “They have a very respected practice that usually handles one huge deal a year,” said Rubens. “Once you strip out that deal, their average deal is something like $50 million.” Among London firms, high-value transactional work remains dominated by the five so-called Magic Circle firms: Clifford Chance; Linklaters; Freshfields Bruckhaus Deringer; Allen & Overy; and Slaughter & May. Ward Bower, a principal with law firm consultancy Altman Weil, said Magic Circle firms would generally only consider mergers with top-tier New York firms that have profits-per-partner of more than $1 million. Those New York firms have so far expressed little interest in merging with their London rivals. In Bower’s view, the Mayer Brown merger will likely presage an increasing wave of mergers between mid-sized British firms and larger American firms, a trend he expects will be helped along by the weak economy in the U.S. “It’s been a stumbling block [to mergers] that U.S. firms have been considerably more profitable than U.K. firms,” Bower said. “That gap has closed somewhat in the last year.” There is still a substantial profitability gap between Mayer Brown and Rowe. The American firm had profits per partner of $725,000 in 2000, according to The American Lawyer‘s Amlaw 100. Rowe, said Rubens, had profits per partner around $550,000 last year, a figure which also represented an increase over the firm’s historic profits in the $300,000-to-$400,000 range. “With the American firms coming in,” Rubens said, “British firms have scrambled to address their levels of profitability.” The merger with Rowe is a major coup for Mayer Brown, Bower said, since Rowe is among “the cream of the mid-sized London firms.” Moreover, Bower said he believes Mayer Brown’s enormous London footprint will give the firm a significant competitive advantage. “There are a lot of firms that have a token presence on the ground in London,” he said. “This isn’t that. With 270 lawyers, they have the critical mass to handle significant matters on the ground.” The two firms began serious discussions in May, said Mark S. Wojciechowski, a New York finance partner who also serves on the firm’s planning and policy committee. The two firms had worked together on a number of matters and partners had good working relationships, Wojciechowski said. Mayer Brown last year acquired 13-lawyer Paris firm Lambert & Lee and the 50-lawyer Frankfurt branch of German law firm Gaedertz. Mayer Brown, like other top Chicago firms, has had to fight for a place on the global stage, Bower said. Last year, the firm’s efforts were overshadowed by competitor Sidley & Austin’s big merger with New York’s Brown & Wood. “They needed to do something,” he said. “This pushes them a long way towards the realm of global firms.”

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