O'Melveny management jets into London as Allen & Overy merger talks heat up
O'Melveny chairman Bradley Butwin meets A&O leaders as talks reach due diligence phase
July 31, 2018 at 09:32 AM
3 minute read
Senior partners from O'Melveny & Myers were in London last week to meet with management at Allen & Overy (A&O) as the pair's transatlantic merger discussions gather pace.
Several members of the US firm's management, including O'Melveny chairman Bradley Butwin, met with A&O's management team last week at the magic circle firm's Spitalfields headquarters, according to multiple partners.
The pair met with A&O senior partner Wim Dejonghe and managing partner Andrew Ballheimer, with US senior partner Tim House also understood to have been in attendance.
The merger talks, which Legal Week revealed in April, are understood to have reached the due diligence stage, and A&O made a presentation about the potential tie-up to its partners at its annual retreat last month.
While the discussions were initially met with scepticism by a swathe of A&O's London partnership, it is understood that opinions have shifted, with many now feeling more optimistic about the potential union. One City partner told Legal Week that there had been more positivity about the discussions in recent weeks.
A number of partners close to the firms have told Legal Week they expect that a successful deal will be reached, although another London partner warned that it "genuinely could go either way".
It is understood no formal proposal will be put to partners before September.
If the pair do combine, it would create a business with revenues of about £2bn ($2.8bn) and a total lawyer headcount of about 3,000.
A&O recently posted 4% growth in both revenue and profit per equity partner (PEP) for 2017-18, adding £54m to its top line during the year to reach £1.57bn, while PEP saw the same percentage increase to hit £1.64m. O'Melveny is similar in terms of profitability, with PEP rising 3% in 2017 to $2m (£1.5m).
Dejonghe and Ballheimer and their leadership predecessors at A&O have long been pushing for a US 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. Legal Week sister publication 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 including a team of Greenberg Traurig restructuring lawyers in New York, as well as Latham 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 US law firms based on factors including revenue per lawyer, pro bono, associate satisfaction and diversity.
Both firms declined to comment.
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