The proposed merger talks between Hogan Lovells and Shearman & Sterling have been called off.
A statement from both firms made the announcement, which would have created a legal behemoth with over 3,000 lawyers globally and revenue of around $3.6bn.
The announcement comes as three partners at Shearman & Sterling’s Munich office, leave to establish a Munich arm for Morgan Lewis marketing the latest in a series of defections from Shearman & Sterling’s European and Middle Eastern offices in recent months.
And Shearman & Sterling laid off 38 employees as we reported last month.
Although the merger talks were initially reported in December both firms have now mutually agreed that a combination at this time is not in the best interest of either firm.
Tony Williams, principal of Jomati Consultants, commented on the complexity of large law firm mergers and the potential conflicts between different practice areas and offices.
While there was a strategic logic to the deal, with the complementary strengths of Hogan Lovells in the US and Shearman & Sterling’s traditional Wall Street practices, there were also significant areas of overlap.
This was highlighted by the departure of several partners from Shearman & Sterling’s London office, even though Hogan Lovells viewed its transatlantic transactional prowess as complementary.
Additionally, Hogan Lovells, on the LawFuel Prestige law firm list, recently posted a modest set of financial results, indicating the challenges it faces in navigating difficult global markets.
The proposed merger with Shearman & Sterling would have given Hogan Lovells greater heft in New York, the challenges associated with such a deal would have been considerable.