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Partners at Andrews Kurth Kenyon and Hunton & Williams have approved a merger deal which will create Hunton Andrews Kurth, a 1,000-lawyer firm with offices in 15 US cities and another five international bases.

Hunton Andrews Kurth, which will officially launch on 2 April, is expected to have combined revenues of more than $750m – a figure that could catapult the merged firm to the US top 50.

Both firms have offices in London. Hunton – which also held talks with Addleshaw Goddard over a merger – has about 20 lawyers in the City, including eight partners, according to its website. The office is led by managing partner Aaron Simpson.

Andrews Kurth, meanwhile, has a five-partner London base led by arbitration partner Melanie Willems, who joined from Chadbourne & Parke in 2013.

The two firms have been discussing a merger for months, and leaders of Houston-based Andrews Kurth and Richmond-based Hunton signed off on the deal in early February.

Hunton managing partner Wally Martinez said his firm’s partners voted unanimously on 16 February in favour of the merger. Andrews Kurth managing partner Robert Jewell said the vote, which was completed at his firm on 15 February, was “overwhelmingly favourable” and included more than 95% of the firm’s partners.

The deal combines strength in both arms of the energy practice, linking Andrews Kurth’s oil and gas practice with Hunton & Williams’ power industry practice. Firm leaders said the combined firm will be one of a few firms that can provide high-calibre services to both arms of the energy sector.

The merger is another sign that firms outside of the US top 50 are feeling increasing market pressure to remain competitive and looking to achieve this by growing larger. Other large Texas firms are also in merger talks, including Foley & Lardner and Gardere Wynne Sewell and Strasburger & Price and Clark Hill.

“The competitive nature of our profession these days demands that we are able to provide high-quality services across a spectrum of legal specialities,” Jewell said.

In the weeks leading up to the agreement, Andrews Kurth lost many lawyers to other firms in Texas, but Martinez said that bleeding did not affect Hunton’s interest in the merger.

“In all honesty, from the Hunton perspective, we are getting exactly what we wanted,” Martinez said. “Would there have been room, and do I think some of those other practices could have prospered here? Sure. But from a strategic standpoint, I could not be happier. I know I speak for my partners.”

Firms that have lured Andrews Kurth lawyers in Texas over the last few weeks include Orrick Herrington & Sutcliffe, which hired a public finance group; Haynes and Boone, which picked up a capital markets partner; White & Case, which opened an office in Houston this month; Katten Muchin Rosenman, which opened an office in Dallas; and DLA Piper, which expanded in Dallas with Andrews Kurth laterals.

This is the second major deal for Andrews Kurth in 18 months. In 2016, Andrews Kurth absorbed 55 lawyers from New York Intellectual property firm Kenyon & Kenyon, and as a result, brought a large intellectual property practice to the combined firm. Jewell said the Kenyon deal “further opened our eyes” to the opportunity of broadening the firm’s practices. However, with the merger, “Kenyon” will be dropped from the firm’s name.

In 2016, Andrews Kurth posted revenues of $289m with 327 lawyers, while gross revenue at Hunton was $541m with 661 lawyers. But revenue per lawyer (RPL) and profits per equity partner (PEP) at the two firms were very close. RPL was $883,000 at Andrews Kurth in 2016 compared with $820,000 at Hunton. PEP was $1.26m at Andrews Kurth, compared with $1.1m at Hunton & Williams.

Jewell said the firms started talking in June 2017, and Martinez added that his first sit-down with Jewell was at a Tex-Mex restaurant in Houston.

Jewell said that during strategic planning, Andrews Kurth partners considered what they would want if combining with another firm. He said Hunton meets those markers, including cultural compatibility, a reputation for excellence, a high-quality practice, geographic reach and a shared vision for the future. He said the firm has also been interested in strengthening its East Coast practice. Andrews Kurth has offices in New York and Washington DC but adding Hunton & Williams expands its geographic reach.

Martinez said a key component of Hunton’s strategic plan calls for substantial growth in Texas because “we think it’s a phenomenal legal market.” The firm has had an office in Dallas since 2002, in Houston since 2005 and in Austin since 2007.

Martinez, who is based in New York and Washington DC, will become managing partner of the combined firm, and Jewell, a partner in Houston, will become managing partner emeritus. George Howell, a partner in New York and Richmond, will remain chairman of the combined firm’s executive committee, which will be comprised of five Andrews Kurth members and nine Hunton partners.

Martinez said Hunton Andrews Kurth will not designate one city as its headquarters.

Firm leaders said Hunton Andrews Kurth will combine offices in the cities where they both currently have offices, including New York, Washington DC and Dallas. But Martinez said he does not have layoffs in mind.

“Like any other business, you continue to look at staffing,” he noted, adding that there is “no plan” for staff reductions.

When asked whether there had been any layoffs at Andrews Kurth or any involuntary exits before the merger, Jewell said he would not comment on any personnel matters.

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