After merger talks with O’Melveny & Myers fizzled out in the fall of 2019, Allen & Overy is still living up to its ambitions in the U.S.
In the last three years, the firm has grown its U.S. partner head count from about 45 to 94, and opened four new offices in Boston, Los Angeles, Silicon Valley and San Francisco.
The fast-growing partnership, coupled with a focus on industry sectors, has allowed A&O to increase its market share. U.S. revenue grew by 55% in 2022 compared to 2021, and generates more than 10% of the firm’s overall revenue, according to U.S. managing partner Tim House.
“We are winning more market share and more U.S. clients. Why is that true? We have greater scale and depth of capability, and in building that we have not compromised on quality,” House said. “We’ve got global coverage matching global capabilities.”
A&O has focused on building mergers & acquisitions, private equity and litigation capabilities for the technology, life sciences, renewable energy, and financial institutions and private capital sectors.
As a result, the firm’s transactional practice has evolved beyond its original presence in New York and Washington, D.C., and represents tech and PE players including Meta and Apollo Global Management.
A&O has also won new clients such as a Fortune 100 global tech company, a global financial services payment company, a global securities trading company and a global life sciences pharmaceutical company, according to the firm.
House said critical to the firm’s strategy is ensuring U.S. partners are engaged in the firm’s global network. That grows the whole pie, and young, high-achieving tech M&A partners in London and Singapore are drawing new business as a result, he said.
Likewise, on the litigation front, the firm is coming to the pitch table with a “better proposition,” including a leading U.S. team to win global mandates, House explained.
House said the firm is now about two-thirds of the size it would like to be in the U.S., and in order to reach a scale similar to its London footprint, it aims to have about 150 partners in the U.S. by 2025.
He predicted future growth in the firm’s capital markets presence as well as its litigation capabilities, as demand for antitrust, white-collar crime and sanctions expertise continues to rise.
How It Stacks Up
A&O naturally drew bicoastal talent to service technology, life sciences, renewable energy and financial institutions and private capital sectors—in many cases via large lateral groups.
In 2021, the firm launched in Los Angeles with a six-partner renewable energy team from Akin Gump Strauss Hauer & Feld and opened in Silicon Valley and San Francisco with an eight-partner technology transactions team from White & Case. In 2022, about one year after the launch in Los Angeles, the firm announced its entrance in Boston with a five-partner IP litigation team from Goodwin Procter.
The growth that catapulted the firm to 94 partners in the U.S. on both coasts stands out compared to the likes of other U.K.-headquartered firms such as Clifford Chance, Freshfields Bruckhaus Deringer, and Linklaters.
Clifford Chance has about 81 partners based in New York and Washington, D.C., according to its website. The firm has made several key hires in the U.S. since 2021, including the recent addition of two Covington & Burling partners.
Freshfields, with about 63 U.S. partners listed on its website, expanded beyond New York and Washington, D.C., and launched an office in Silicon Valley in 2021. Following that office opening, the firm appointed Silicon Valley-based partner Sarah Solum to U.S. regional managing partner, and has won work for top tech clients in the region.
Linklaters’ growth has been noticeably slower, though the firm hired a duo from Prudential Financial to launch a U.S. data solutions, cyber and privacy practice out of the New York office, and then a partner from Loeb & Loeb. The firm’s base on New York and D.C. partners stands around 33, according to its website.
While A&O boasts the most U.S.-based partners compared to its peer firms, the amount of revenue it is able to generate in the U.S. remains a work in progress. A&O’s U.S. revenue exceeded 10% of its global revenue in 2022, though the firm noted that it does not publicly report revenue by region and instead tends to divide revenue by sector.
Estimates from Companies House, which publishes LLP accounts in the U.K., show that A&O grew its U.S. revenue in 2022 compared to 2021, though its competitors may have grown in that time as well.
In 2021, A&O’s 2021 revenue from the Americas totaled £161.2 million, or 8.9% of its overall revenue. Freshfields’ revenue from the Americas stood at £174 million, or 10.6% of its total; Clifford Chance’s revenue from the Americas was £246 million, or 13.5% of its total; and Linklaters’ revenue from the Americas was £91.2 million, or 5.5% of its total.
How It Was Done
As A&O looks to continue its growth in the U.S., the firm is focused on building a critical mass of lawyers well-connected to local clients, while ensuring buy-in from global partners at the firm.
With each group acquisition “momentum builds and gives rise to opportunities,” House said, noting that it was easier to link up with the team from Goodwin this year because it wasn’t just the management team presenting a compelling narrative, but other partners that had joined the firm the previous year and integrated successfully.
One crucial change to the firm’s expansion in the U.S. has been the implementation of a modified lockstep compensation system, which encourages individuals to grow the overall pie of business for the firm.
“Candidly, with each group hire, you learn how to make the integration process smoother and simpler,” House added.
“One thing that has been helpful … if you can think through how you’ll lift the incoming team, and how the team will lift your practice groups globally at the client level, then the discussion becomes focused on the external benefits to clients. That becomes a self-reinforcing strategy and critically points the path to integration,” he said.
A&O also enlisted some of its homegrown leadership to assist with the newly developed sites in the U.S.
Karen Seward, the firm’s global co-head of litigation, relocated to Northern California, and energy partner Kent Rowey, who originally joined the firm in New York, is spending much of his time in the Los Angeles office.
Seward emphasized her role as a “navigator” rather than a manager in Northern California, noting that she is registered as a foreign legal consultant.
“One of the things that distinguish our approach is that we don’t think we have all the answers,” Seward said. “We want to get under the skin of the valley and develop an understanding as we build. I’m not flying in to keep an eye on the team.”
Seward said she learned “that the world is a very small place” and in fact the placeholder of Zoom has accelerated skills and the competency of putting people together, from the U.S. to Australia to Indonesia.
She pointed out that global connectivity is just as important for tech and life sciences clients that the firm serves. For instance, the intellectual property litigation practice—a key priority in both the U.S. and China—has seen heavy demand as clients look to proactively bring proceedings and protect their patents.
“The major assets of these new world companies are just their people and the intellectual property in their heads. These assets have driven legal markets to respond,” she said. “We’ve seen the emergence of a joined-up global strategy. Since our teams in Silicon Valley and Boston have arrived, we’ve seen more and more partners from other parts of the world working on clients’ matters.”
The U.S. litigation practice is already the largest of its global litigation teams, according to House. It has 28 partners based in the U.S. Last week, the firm appointed New York partner David Esseks to serve as global co-chair of litigation alongside Seward.
House noted in a February interview that A&O has a top-tier IP litigation practice in the Netherlands, Germany, France and the U.K., and thus the new team from Goodwin was able to link up with some 20 partners around the world.
That goes back to the firm’s original pitch to the recent group additions, according to House.
He said, “If we give you the quality and scale that is equivalent to what you have in the rest of the world, we’ll be able to offer synergies and efficiencies to clients and avoid the risk of competing firms tripping over each other.”