Senior partners from O’Melveny & Myers were in London last week to meet with management at Allen & Overy as the pair’s trans-Atlantic merger discussions gather pace.
Several members of the U.S. firm’s management, including O’Melveny chairman Bradley Butwin, met with Allen & Overy’s management team last week at the Magic Circle firm’s Spitalfields headquarters, according to multiple partners. They met with Allen & Overy senior partner Wim Dejonghe and managing partner Andrew Ballheimer.
Legal Week, ALM’s London-based publication, and The American Lawyer reported on the merger talks in April and Allen & Overy made a presentation about the potential tie-up to its partners at its annual retreat last month.
While the discussions were initially met with skepticism by a swathe of Allen & Overy’s London partnership, opinions appear to have shifted, with many now feeling more optimistic about the potential union. One London-based partner told Legal Week that there has been more positivity about the discussions in recent weeks.
A number of partners close to the firms told Legal Week they expect that a successful deal will be reached, although another London partner warned that it “genuinely could go either way.”
No formal proposal is expected to be put to partners before September.
If the pair do combine, it would create a business with revenues of approximately £2 billion ($2.8 billion) and a total lawyer head count of about 3,000.
Allen & Overy recently posted 4 percent growth in both revenue and profit per equity partner (PEP) for 2017-18, adding £54 million ($70.85 million) to its top line during the year to reach £1.57 billion ($2.06 billion), while PEP saw the same percentage increase to hit £1.64 million ($2.15 million). O’Melveny is similar in terms of profitability, with PEP rising 3 percent in 2017 to $2 million (£1.5m).
Dejonghe and Ballheimer and their leadership predecessors at Allen & Overy have long been pushing for a U.S. merger, with the pair highlighting the issue as a priority when running for their roles in 2016.
Los Angeles-based O’Melveny, which since 2011 has been led by Butwin, has been exploring a number of growth options in recent years. The New York Law Journal reported late last year that the firm had held preliminary merger discussions with Willkie Farr & Gallagher, but that the discussions never went far. Both firms denied they held merger talks.
Recent hires for O’Melveny have included a team of Greenberg Traurig restructuring lawyers in New York, as well as Latham & Watkins counsel Geoff Kuziemko, who joined as a partner in San Francisco. The firm also recently moved up three spots to ninth in The American Lawyer’s A-List ranking, which identifies the most well-rounded U.S. law firms based on such factors as revenue per lawyer, pro bono, associate satisfaction and diversity.
Both firms declined to comment.