Allen & Overy to Hold Open Ballot if O'Melveny Merger Progresses
The magic circle firm's system would expose how partners vote on what would be an historic industry decision.
June 05, 2019 at 12:26 PM
3 minute read
Allen & Overy will hold an open ballot if its merger discussions with O'Melveny & Myers move to a vote, according to several people with knowledge of the situation.
That format would allow the firm's management to see whether individual partners had voted in favour of the tie-up or not, which some people close to the situation believe could pressure partners into voting yes.
One A&O partner, who plans to vote in favour if a vote is held, said the firm's senior partner Wim Dejonghe "feels strongly" about it being an open vote.
A second person with knowledge of the situation said: "Wim made an announcement internally saying that a partnership's decisions should be made openly and be accountable."
An A&O partner said there have been some internal disagreements about the prospect of an open ballot, but another person at the firm said the majority were in favour of the arrangement.
One person said some junior partners had previously expressed concern about an open ballot for a decision of this magnitude, arguing they would prefer the security of an anonymous vote to avoid feeling pressured into a decision.
One former A&O partner said: "No votes are secret at A&O apart from management elections. In this case, if management says the merger is a great thing to do, then it's brave to vote against it."
No timeline for any decisions has been set by either firm, with people at both firms stressing that discussions are ongoing and that a vote is still not guaranteed.
An A&O partner added: "I don't think they'll call a vote until they're sure it would go through. We have to have an ambition to do something, but it has to be on the right terms."
Two people Legal Week spoke to expect that a decision on whether to hold a vote will be made this summer, but another said there was no timeline in place.
The progression follows months of discussions between both firms' management teams, with recent issues including remuneration, pension liabilities, working capital requirements and firm governance being thrashed out.
Legal Week revealed the two firms were in merger discussions more than 12 months ago.
Since then, both firms' senior management teams have held high-level discussions across their international operations. Meetings have taken place at A&O's London office, a hotel in Germany and O'Melveny's Singapore base.
Earlier this year, O'Melveny announced record financial results. Its gross revenue increased by 8.5%, climbing just past the $800 million mark. The firm's revenue per lawyer hit $1.19 million, while a 12.6% increase in profits per equity partner brought that figure to $2.26 million.
The firm has seen several partner departures in London as discussions continue, to rival U.S. firms including Akin Gump and White & Case.
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