Eversheds Sutherland pulled off quite a feat this week, mustering 680 partners and top operations people together in London for the firm’s first partners’ meeting amid record-setting June heat.
Attendees from 30 countries met face to face—many for the first time—after legacy U.K. firm Eversheds and Atlanta-based Sutherland Asbill & Brennan combined on Feb. 1 to form a 2,300-lawyer global giant.
Combining forces doesn’t always pay off for big law firms. A recent ALM Intelligence report found that most such combinations since 2000 haven’t created significant growth and cost the firms more than anticipated. For almost one-third of the 50 combinations surveyed, revenue had dropped five years later.
But in a wide-ranging conversation on June 21, after the London meeting, Eversheds chief executive Lee Ranson and Sutherland managing partner Mark Wasserman said they’re already winning more work from some large clients, including projects that they wouldn’t have gotten individually.
Eversheds and Sutherland are still separate financial entities under the combination’s English company-limited-by-guarantee structure. But Eversheds Sutherland is jointly governed by a 10-partner global executive committee with equal representation from each legacy firm, headed by Ranson and Wasserman, who are the co-CEOs.
It’s a major undertaking to bring so many people together in person, not to mention the lawyer time and other costs for such a large entity—Eversheds Sutherland employs about 4,000 people—but Ranson and Wasserman said the expense of the London meeting was worth it. They said people have to actually know each other to truly collaborate and jointly pitch clients, which is how they get more work.
What has the combination meant in terms of winning measurable new client work?
Lee Ranson: In our last interview [right before combining], we talked about the focus on clients being the real test. Some combinations had stopped once they made the announcement—there did not seem to be too much momentum. In the 140 days since ours went into effect, the number of opportunities to price new potential workstreams, the number of files opened and referrals have significantly exceeded our expectations.
We just got word today that we were hired by a legacy Eversheds client for a large infrastructure opportunity in the U.S. [Ranson wasn't authorized to identify the client.] Legacy Sutherland wouldn’t have won it. … It’s not the kind of thing they would have had the capability for. That’s the kind of thing we’re seeing more regularly at this stage.
Mark Wasserman: Freepoint Commodities is a legacy Sutherland energy trading client. The combination has generated work in a number of additional places, such as Singapore and China. The same for Cox Enterprises, another Sutherland client. They do a lot of international work with Manheim, their auto-auction business.
Ranson: We both had been appointed to Shell’s respective panels. The combination puts us in a different place as far as the projects they are considering us for.
Wasserman: Now we’re doing work for Shell that involves people in the U.K. and the U.S. that we were not considered for on either side before. We’re on the panel for Koch Industries now, which, obviously, includes Georgia-Pacific in Atlanta. The big reason we’re on the panel is because we now have capabilities worldwide
We have clients that are companies across the size spectrum—some startups and private equity firms as well as 60 percent of the FTSE 100 and Fortune 100.
Flying 680 people to London sounds expensive. Are those all partners? Did you pay for it—or did they?
Wasserman: We paid for it. It was about 140 U.S. partners [from Sutherland] and 400 from outside the U.S. [Eversheds], plus senior people from our U.S. and U.K. operations teams.
Ranson: They were the operations people essential to the merger coming together—the marketing and IT teams, the risk team to address conflicts and systems in place, plus facilities and finance.
Wasserman: This was our partner meeting for the entire firm. If it were just Sutherland, people would be flying to Florida for the meeting, so the plane flight is a little more expensive, but not that much.
Ranson: It’s the same per capita cost as international business conferences we’ve held in the past, and it was the start of colleagues becoming friends. As an example, the practice and industry sector leaders—12 or 13 groups—got together on Monday afternoon to talk about their integration plans for three hours … from very detailed plans around specific clients to introducing pen pals within the specific groups. That’s how we’re linking up associates. Each gets one, and they are telling each other about what they do and what their skills are.
What are your major shared practices?
Wasserman: Our energy practices have joined up. We mentioned Shell. In the renewable energy space, we are seeing a number of offerings where we can work for clients. Real estate is another one that we tied up from the get-go. And litigation. Both firms are very industry-sector focused. We put those leaders together months before the combination to put together plans.
Ranson: Our practices are not complete mirror images, but there is a significant degree of alignment and joint plans within the groups as to how we want to take the business forward.
Is your real estate practice local development or global real estate finance or what?
Wasserman: Both. Legacy Sutherland has a big practice that includes timberland and agricultural work, as well as resort development and leasing. … We have a lot of joint clients, including in real estate finance, that we do work for around the world.
OK, so your finances are separate, but all of this integration is expensive. How are you sharing expenses?
Wasserman: We contribute jointly for conferences for clients. We had a joint conference in Geneva last week on the commodities trading side for clients. It’s not something that either firm had done—at least not with the same amount of clients—before Feb. 1. We’re still looking at joint technology that we want to offer clients, like artificial intelligence, and the things we offer through the shared website.
Ranson: Each firm has got a bonus pool designated for partner compensation at the end of the year that’s earmarked for sharing behaviors.
How much is this combination costing in nonbillable time and expenses?
Ranson: Obviously there are costs. It would be silly to assume you could do something like this without thinking you’d incur expenses. But we are also reaping greater benefits. We’re making more on the client front.
Wasserman: These are expenses we want to incur. A lot of those are people and travel costs—for example, making sure we are getting people from the U.S. and U.K. to China, Asia and Africa. For the conference, we encouraged people to plan client meetings. Some got here early for that.
We’re under the budgets we set for those integration expenses, and we budgeted pretty conservatively.
What about profit-sharing? Are you doing that?
Wasserman: No. We’re sharing in terms of opportunities.
Ranson: If we’re successful with all the things we’ve been talking about, then we’re successful in earning more revenue with more products. That’s the benefit. If we get all these other things right, Mark and I think [profit] will take care of itself. And there are so many opportunities where clients we advise are cross-jurisdictional, so a project can provide many jobs in many locations.
So who gets the bucks for advising one another’s legacy clients, like the legacy Eversheds client on the new U.S. infrastructure project?
Wasserman: Sutherland gets the bucks for that. But that’s not how we are thinking. If we are successful, we will generate more work overall, including in Eastern and Western Europe, and everyone benefits. We’ve been taking a long-term view from the beginning.
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