Allen & Overy's new leaders target US expansion

For any firm to be credible within the global elite in the next 20 years they are going to have to be able to demonstrate that they can transact in New York

Another partner says: “I don’t think there’s a disagreement about how you go about it. It’s getting the right people and/or firm that’s where the difficulty is.”

One potential obstacle is that the firm is understood to be keen to maintain its lockstep system. A&O introduced a new discretionary bonus pool a few years ago to reward star performers and new recruits but has nothing more far-reaching. 

One partner says: “I think that it’s important for the firm to maintain its culture including the fact that we all contribute to a single profit pool. While there is some equity management, the culture of having a lockstep makes sure that we all contribute. We are not the only firm struggling to manage this though.”

Dejonghe and Ballheimer are also expected to run the rule over the firm’s governance structure. Partners say that throughout the election process there was a recognition that the growth of the firm, which has expanded from 36 offices in 2011 to 45 in 2016, had made it more challenging to manage without a formal management committee. 

A&O currently has a board of eight members and a selection of committees focused on specific areas including risk, audit and IT.

“Just to visit every office you rack up quite a lot of air miles,” says one partner. “The talk is about having some form of executive committee for that reason – the logistics of it.”

Legal Week also understands that there could also be changes to the firm’s appraisal system on the cards. 

During the election some partners said they were unhappy with the current system, which they feel does not adequately recognise their individual contributions. They argued that the current system places too much emphasis on contribution to a specific office rather than a global practice.

In this way, they argued, partners in less profitable jurisdictions were sometimes not being recognised for their work for global clients.

One partner says: “We will probably need to look more at the contribution of partners to their practice. The key thing is to eliminate all the internal barriers that make some people feel that they are treated less well than others.”

There’s a lot of consensus about what we need to do and how we need to do it

Partners said there was little difference between the different candidates’ manifestos, with all of the issues above expected to have been on the agenda no matter who was elected. 

“There’s a lot of consensus about what we need to do and how we need to do it,” says one partner. “That’s a good thing.”

Another adds: “It was more about the qualities of the candidates. My feeling is that people were looking at some form of continuity.”

The track records of Dejonghe and Ballheimer were key factors in winning votes.

Since Dejonghe became managing partner in May 2008 revenue has risen from £1.09bn in 2008-09 to £1.23bn in 2014-15, with profit per equity partner climbing from £1m to £1.21m. Meanwhile Ballheimer is seen as having steered the corporate practice through choppy waters.

“He has not done any firmwide management before but he has managed the corporate department for some time in a difficult market with great success. Hopefully that will all bode well for when he’s managing partner, ” said one partner.

In Dejonghe’s case his “personal charisma” and “charm” were cited by many partners as qualities that make him ideal for the more client-facing senior partner role.

Ballheimer’s experience working in the New York office meanwhile was appealing to partners keen to see the firm enhance its presence stateside. “I think of all the candidates he probably had more hands on in-country experience in the US,” one partner says.

Another adds: “The interesting thing about Andrew Ballheimer is that he was able to go to Tokyo and build an impressive practice there, and go to New York and build and impressive practice there, and then go to London and build an impressive practice.”

A spokesperson said: “The new management team will outline their plans to the partnership at the global partners conference in May and then the rest of the business.”

Outgoing senior partner Morley discussed the need for A&O to make more progress in the US in a recent video interview with Legal Week.