The Atlanta legal market stands to see its second transatlantic merger deal in as many years with this week's news that Sutherland Asbill & Brennan could combine with Eversheds, but the path and outcome for Sutherland is likely to be much different.

Unlike McKenna Long & Aldridge's acquisition by Dentons, Sutherland would not lose its name, and it would be a joint partner with Eversheds, according to the firms' announcement. Their equity partnerships were presented the proposals on Tuesday (29 November) and are expected to vote before the end of the year.

The new firm, Eversheds Sutherland, would be overseen by a global board with equal representation from each firm, the firms said. What's more, Sutherland would not have to merge with a US branch of Eversheds, and thus would not face the problems with client conflicts that plagued the Dentons-McKenna tie-up.

When McKenna's partners were deciding whether to join Dentons last year, they had to weigh up the potential benefits of global reach against losing their name and merging both their finances and operations with Dentons' US branch – formerly Sonnenschein Nath & Rosenthal, a venerable Chicago firm that had merged with the UK's Denton Wilde Sapte in 2010 to form legacy firm SNR Denton.

The McKenna partners balked when the deal was first put to a vote in late 2013, but then voted in favour of being acquired by Dentons in the spring of 2015. Even so, dozens of partners left, because they did not see the benefit to their local practices of joining a global firm with a potentially higher rate structure, or they had too many client conflicts and potential conflicts.

However, Eversheds Sutherland does not present that degree of conflicts, since the firms operate in different jurisdictions.

"I only see this combination as being additive," says Atlanta recruiter Stephen Stone of Stone Search Partners. "They're sharing the nameplate and giving partners opportunities to deepen and widen their client relationships and sell new business."

The combination would create a roughly 2,300-lawyer global firm. Sutherland has about 400 lawyers – all in the US except for small outposts in London and Geneva – and Eversheds has 1,400 lawyers plus 500 affiliated lawyers located in Europe, the Middle East and Asia.

Sutherland has always had a reputation for doing top quality work, while also having a very collegial environment

Law firm consultants and local legal recruiters have called it a smart move for both Sutherland and Eversheds, as Sutherland would gain global reach to better serve multinational clients, while Eversheds would gain access to the largest legal market in the world – the US.

"Sutherland is a very high-end, well regarded firm, but primarily a domestic US firm, so the ability to extend their reach for American clients creates significant opportunities," says Joe Altonji, a principal at LawVision Group in Chicago, who is not involved in the deal.

It remains to be seen how well the firms would be able to coordinate their management, integrate their services and maintain their cultures.

"Sutherland has always had a reputation here in Atlanta and the other cities they're in for doing top quality work and recruiting top quality talent, while also having a very collegial environment," says Shannan Rahman, an Atlanta recruiter at The Partners Group. "It's a firm that we don't see a lot of lawyers move out of to go to another firm."

"I think Sutherland will be able to retain some of the unique qualities that have made it stand out and be an attractive platform for many lawyers," Rahman adds.

Since the two firms don't have overlapping offices in the US, there aren't the same cultural or turf issues, Rahman says, "so I would hope it would lessen the conflicts we saw popping up with the Dentons-McKenna merger".

A verein?

While the legal and financial structure of an Eversheds Sutherland tie-up remains unclear, it is expected that the firms would keep finances separate.

A verein, where firms share a name, clients and resources but keep profit pools separate, has become the norm for most large, cross-border law firm combinations. "For a combination of this size, especially when the firms are in economically diverse markets, sometimes it solves a lot of problems," Altonji says.

A verein is typically the easiest way for a firm to expand globally, says Lisa Smith, a principal at Fairfax Associates in Washington DC, who also was not involved in the deal. "At this point, it's difficult for firms to do it on their own. It's expensive and the choices are not great – combining is usually better," she says.

"It would be hard at 400 lawyers to build your own international presence. You can add small offices but it's probably going to be expensive," she says.

"Sophisticated clients of a firm like Sutherland are going to want depth in every market," Smith adds. "Clients are looking for location – and also for a deal sheet. They want to know that the lawyers they are working with have done this four or five or 20 times before."

It gives Sutherland a breadth of international exposure and they don't lose a lot of power by doing it

Using a verein does not mean a combination isn't a true merger, Altonji says, adding that in the accounting industry, the Big Four firms are perceived as international firms, even though they are in fact vereins. "They act as global firms. They co-mingle resources and do joint marketing," he says.

Clients do not focus so much on the internal structure of a firm, Smith says, adding that the clients of large global firms that she's talked to have responded well to vereins.

"I think vereins can be misunderstood. They can have incentives to encourage partners to work effectively together," Smith says. "Some are quite integrated."

"You're going to get more integrated service than through a referral relationship," she adds.

A referral network can work well if there are not viable competitors offering one-stop shopping, Smith says, "but as firms become more global, this can be more appealing to client companies than working with five disconnected firms."

"The reality is the practice of law is a relationship business. Clients are seeking trusted advisers," says Melba Hughes, a partner at Major Lindsey & Africa, which places lawyers globally. "As long as their trusted advisers are available and responsive about doing their work, the clients are not so concerned about your backroom."

Joint partnership

The Eversheds Sutherland combination is being presented as a joint partnership, despite Eversheds' far greater size.

That could make sense, based on what each brings to the table, Altonji says. "Eversheds is getting a great partner. If the price for that is a shared governance structure at the global level – with local governance presumably still separate – and given that the US is the biggest market out there, it may well be a price that Eversheds is perfectly happy to pay."

While Eversheds has at least three times as many lawyers as Sutherland, the profits per equity partner (PEP) are commensurate: Sutherland's PEP was $1.02m in 2015, while Eversheds' was $921,000 for 2015-16, at the current exchange rate.

Eversheds has relatively fewer equity partners – making up about one tenth of its total lawyers (118 out of 1,237 lawyers last year), compared with one fifth at Sutherland (86 out of 380 lawyers last year).

What's more, Eversheds' revenue per lawyer (RPL) is lower. According to The American Lawyer, Eversheds' RPL was $500,000 for its last financial year ($620m revenue and 1,237 lawyers), compared with Sutherland's RPL last year of $790,000 ($301m in revenue and 380 lawyers).

"It gives Sutherland a breadth of international exposure and they don't lose a lot of power by doing it. They still have the ability to control what they need to control," says another local recruiter, Raj Nichani of The RMN Agency.

"The challenge, as with all mergers, is that the partners have to get to know each other," Nichani says. "Sutherland has great technology for virtual meetings but there is nothing like actual one-on-one conversations among partners."