Top 10 transatlantic legal giant created as long-touted merger partners combine under Swiss verein deal

Norton Rose has sealed one of the largest-ever transatlantic mergers, with the firm agreeing to tie up with Houston's Fulbright & Jaworski in June 2013. 

The deal, approved by more than 75% of Fulbright partners at the weekend and by Norton Rose partners at the firm's Toronto conference earlier this month, will create a firm just outside the global top five, with combined revenues of nearly $2bn (£1.26bn) – just behind Clifford Chance. 

Going under the Norton Rose Fulbright banner, the merged firm will have 3,800 lawyers operating from 55 offices worldwide, with 800 of these lawyers based across Fulbright's existing 11 US offices. The union will see Fulbright joining Norton Rose's Swiss verein structure, maintaining separate profit centres but sharing costs. 

Norton Rose Group chief executive Peter Martyr will maintain the same role at the merged firm. Fulbright chair-elect Ken Stewart will serve as managing partner of the US operations and will take up a senior position on Norton Rose Fulbright's global executive committee. 

The deal strengthens Norton Rose's existing sector focus which includes energy; pharmaceuticals and life sciences; financial institutions; infrastructure, mining and commodities; and technology and transport. It will also see the firm adding a healthcare focus and establishing a global regulatory and investigations practice. 

Martyr (pictured) said: "We have been looking at the US market for a number of years, seeking a firm that meets our requirements for excellence in law, good business synergies and a compatible culture. 

"Fulbright meets all our criteria. We have a very complementary client base and share many key common clients. And one of the advantages of operating in a Swiss verein structure is that we can focus on these without being distracted by the need to rationalise the business.

Fulbright chair Steven Pfeiffer told Legal Week: "Norton Rose and Fulbright share remarkable similarities in practice strengths. We have had a good relationship for four or five years now, and we have every certainty that the combination will be smooth and positive."

Legal Week first revealed that Fulbright was targeting a merger with Norton Rose following a review of its international strategy in September 2011, and reported that Norton Rose had confirmed it was talking to the firm in May 2012. 

The latest union means Norton Rose will have completed five mergers in less than four years. The firm merged with Australia's Deacons in January 2010 and went on to seal a three-way combination with Canadian firm Ogilvy Renault and South Africa's Deneys Reitz in 2011. Its most recent merger, with Canadian firm Macleod Dixon, went live on 1 January this year. 

The deal has received relatively positive reaction from the market, with one magic circle partner stating: "Norton Rose has adopted a very consistent strategy and this is just the latest development. A US arm was always going to be necessary to make this strategy work, so the tie-up seems sensible. It is hard to know who is benefiting more between Fulbright and Norton Rose and, indeed, between clients and the firm. It is going to require a huge amount of time and effort to make a firm of this size work."

One headhunter said: "Good merger, at least on paper. It's complementary, there are synergies, and it works in my mind."

To date, there have been only a handful of tie-ups between large UK and US firms. Legacy Lovells and US firm Hogan & Hartson merged in May 2010 in a deal which created a firm then with combined revenues of around £1.2bn, equally split between two firms. Later that year, Denton Wilde Sapte and Sonnenschein Nath Rosenthal announced a tie-up worth around £500m to form SNR Denton. 

But despite the apparent threat to the magic circle from such globally ambitious firms, some maintain these tie-ups will not result in any fundamental shift in dynamic. One partner at a magic circle firm said: "While they are both strong firms, I'm doubtful that Norton Rose and Fulbright will actually make anything greater together than they already have individually."

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The merger – in numbers

  • Combined revenue: $1.92bn; Norton Rose $1.32bn (£822m); Fulbright $597.5m (£377m)
  • Profits per partner: Norton Rose $620,000 (£391,000); Fulbright $800,000 (£505,000)
  • Office count: 55 (including duplicate offices in Beijing, Dubai, Hong Kong, London and Munich)
  • US offices: Austin, Dallas, Denver, Houston, Los Angeles, Minneapolis, New York, Pittsburgh-Southpointe, San Antonio, St Louis and Washington DC