More than halfway through their terms as Allen & Overy (A&O) senior and managing partner, Wim Dejonghe and Andrew Ballheimer face a pivotal moment in the magic circle firm's history.

The pair are currently overseeing merger talks with US firm O'Melveny & Myers, with many expecting a vote on the deal before the end of the year. The outcome will define not only A&O's future, but also the legacies of the leadership duo. At this key juncture, how does the market rate Dejonghe and Ballheimer's time at A&O's helm so far?

Since taking charge of the firm in 2016, they have overseen two years of impressive financial results, with the firm's record-breaking performance for 2016-17 propelling profit per equity partner (PEP) up by 26% to break £1.5m and revenue rising 16% to £1.52bn.

And while 2017-18 was a year of less dramatic growth, revenue and PEP still rose 4% to £1.57bn and £1.64m respectively.

An A&O City partner says the pair have done "astonishingly well" financially, adding that the firm's 2018-19 results so far are "amazing" and will be "way ahead of last year".

That partner states: "Wim is the one who's made us financially successful. He's very target-driven."

A former European partner describes being "stunned" by the financial performance at the firm in recent years, adding: "Wim and Andrew are both very financials-focused."

While all current and former A&O partners Legal Week spoke to for this article extolled the firm's financial performance during the past two years, praise of the approach deployed to achieve these headline-grabbing figures is less unanimous.

You need to pay a price if you want a US merger

What is characterised as an incessant focus on financial metrics has caused some "grumbling" within the firm, according to one former London partner. He explains: "At A&O there's a metric for everything, and that's been a frustration for a lot of partners. You get bored of operating to move numbers rather than going out and finding clients."

However, another current London partner tempers this: "Wim is obsessed with numbers – him and Andrew both are – but I don't feel any pressure from it."

Other methods of boosting profitability have included a rethink of partner remuneration. Last year, the firm undertook a review of its German partnership's equity, with 50% of partners seeing their points either held or cut in a bid to improve profitability.

According to several former partners, this approach has also been adopted in the firm's Paris office. One former partner tells Legal Week: "Paris has already been affected, and there is more to come."

The ex-partner says that has put the partnership in "defensive mode", adding: "There are a number of partners watching their backs due to that equity management."

This approach has left some concerned over the effect on culture. As one former German partner puts it: "You can only think about a US merger if you pimp up the firm before. Their best-ever year brought them into the same ballpark as O'Melveny – but this was achieved through equity management. You need to pay a price if you want a US merger."

Another former London partner adds: "They have been more aggressive in terms of cutting equity. How high a price are you prepared to pay culturally for it?"

They were worried that very talented partners weren't being incentivised

At the time of Dejonghe and Ballheimer's election, A&O partners expected them to run the rule over the firm's governance structure – and following a partnership consultation, a new executive committee was introduced last year, which is chaired by the pair.

One former partner says: "When they started, they were worried that very talented senior client partners weren't being incentivised within the firm. They wanted to get some of those people onto the exec committee."

In 2016, some partners were also unhappy with A&O's appraisal system, which they felt did not adequately recognise their individual contributions. They argued that the system placed too much emphasis on contribution to a specific office rather than a global practice.

Several years ago, the firm introduced a discretionary bonus pool to reward star performers and new recruits, which is understood to have been used for the first time when it hired a high-profile New York finance team two years ago. However, according to one ex-City partner, last year the firm drew on the pool to reward London partners for the first time, adding: "There was a lot of inward pressure to use it for existing partners during the last financial year."

Earlier this year, the firm also announced plans to move all of its staff to a new performance management scheme, becoming the latest firm to scrap annual appraisals in favour of a system based on ongoing feedback.

They promised to think about how technology is invading everything, and to throw our balance sheet behind it

Dejonghe and Ballheimer also attract praise for fostering a sense of innovation at the firm, and last year A&O launched its tech startup initiative Fuse, which now houses companies including Kira Systems and Neota Logic, while former resident Bloomsbury AI was acquired by Facebook earlier this year.

One London partner says: "They promised to think carefully about the future and how technology is invading everything, and to throw our balance sheet behind that. They've been tangibly successful at it."

The duo's commitment to improving the firm's diversity statistics is also lauded. A&O has made a number of pushes recently, including expanding its reverse mentoring scheme and a pilot launch of a remote working hub in Vauxhall, as part of a renewed push to boost gender diversity at the firm.

One partner says: "Wim and Andrew have both made a big push in diversity. They've been firmer with partners on how we meet targets. It's great to see their unrelenting focus on that."

A move as transformative as an O'Melveny merger would clearly require a partnership's faith in its leadership, and in Dejonghe and Ballheimer's case, this connection seems fairly solid – though not without the odd crack.

A former London partner says: "I really like Wim. He's a very straightforward, honest guy and I trust him. I had a favourable impression of Andrew, and he's well liked."

The ex-partner adds that Dejonghe recently travelled to Hong Kong to attend an A&O partner's funeral, stating: "He's incredibly dedicated. He would never miss an event like that."

However, one current partner claims Dejonghe is "not good" at listening to people, and can be "a bit of a dictator", though concedes: "Most successful leaders often are – you can't be weak."

The current partner adds: "Andrew is a good guy. Neither of them are very visible – but if they were walking corridors they wouldn't be able to do their day jobs."

At the time of the pair's elections in 2016, all contenders for the positions highlighted the need for US expansion. When Dejonghe and Ballheimer won, they shouldered that responsibility. Sources for this piece consistently state the duo will be "defined" by the outcome of the ongoing discussions.

As one German former partner bluntly remarks: "Wim and Andrew have put all their eggs in this basket. Their personal fate depends on the success of this project."