Allen & O'Melveny or A&O&O? Name Game Fun Conceals The Insecurities Of A Generation
Less than 10 years ago eyebrows would have been raised if any magic circle member had held merger talks with a U.S. firm not eligible to wear white shoes. Not any more.
March 14, 2019 at 09:12 AM
4 minute read
"Allen Myers sounds like a 1970s porn star," says one top partner at a U.S. firm in London. Such is the interest in the merger talks between Allen & Overy and O'Melveny & Myers that the name appears to be open to public debate.
Understandable. This potential transatlantic merger discussion is the most important for a generation because it is likely to set the tone for the future of all the top U.K. firms.
It is the hot topic in restaurants, bars and meeting rooms across London and beyond, as the legal world contemplates its future.
A Legal Week Twitter poll has found readers are reluctant to see the A&O brand go, with more than four in 10 saying that should be the name of the merged firm, should a deal complete. Allen & O'Melveny was also popular, competing with Allen Myers. Hardly anyone likes O'Melveny & Allen. What other options are available? AOM or A&O&O?
The fact that there is even a debate about the name at all is telling, because for the first time it feels as though a deal really could happen. But the chatter tells us less about the marketing abilities of rival law firms and more about the potential implications a deal could have.
If it were to be successful, what would it mean for Linklaters and Freshfields Bruckhaus Deringer? Would they really be able to keep a straight face while describing their plan of building up a New York presence organically?
In all likelihood, the pressure it would put on rivals would be immense and would probably even turn the heads of management at Latham & Watkins and Kirkland & Ellis. But there would be even bigger implications if the talks were to fail.
A&O's strategy would feel rudderless to say the least. Linklaters and Freshfields would also know, as if they needed any further evidence, that the era of being able to secure a decent transatlantic merger has well and truly passed.
Less than a decade ago, many would have thought that O'Melveny was a step down for A&O. In years gone by there has been talk of magic circle firms merging with one of the white-shoe firms, such as Sullivan & Cromwell or Davis Polk & Wardwell.
But a magic circle firm trying to merge with Davis Polk "is a bit like me trying to marry Beyonce", explains one middle-aged magic circle partner. "It's never going to happen."
Not only is that out of reach, but if A&O cannot even secure a deal with a mid-tier U.S. firm like O'Melveny, then perhaps it will mean that all decent deals are now out of reach.
Without the flexible remuneration structure nor the home market strength on offer to enable them to break into the U.S. in any meaningful way, U.K. firms would face the prospect of a long, gradual erosion of market share. One glance at the growth rates of U.S.-based firms in London in 2018 shows that they keep on getting more mandates.
This is not to say the deal would be better for A&O than for O'Melveny. A&O arguably has a superior brand and the U.S. firm faces its own challenges about future strategy, which this merger could go a long way to solving. But at least O'Melveny and its U.S. rivals do not have the same pressure of a ticking clock.
Rivals, especially those in the U.K., are watching A&O's progress intently. Behind the fun of the name game there is a nervousness that suggests, however unwillingly, they want this deal to succeed.
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