Herbert Smith Freehills and Kramer Levin launch latest transatlantic merger

Reuters

2 days ago

June 2 (Reuters) - Herbert Smith Freehills and Kramer Levin have finalized the latest major legal industry merger of recent years, combining to form a 2,700-lawyer firm with over $2 billion in revenue.
The merger took effect on Sunday following a partnership vote in April, creating what they have described as a top 20 firm globally under the name Herbert Smith Freehills Kramer.
The combination of New York-founded Kramer Levin and Herbert Smith Freehills, a larger firm with UK and Australian roots, continues a move toward consolidation in the industry as law firms seek scale to compete across major markets and practice areas.
Justin D'Agostino, global CEO of the combined firm, said in an interview on Monday that HSF Kramer wants to expand its U.S. work in practice areas such as private equity and litigation, arbitration and white-collar crime.
"We're coming in with a very clear investment plan, a very clear growth plan for the United States and internationally," said D'Agostino, a longtime Herbert Smith Freehills lawyer who splits time between London and Hong Kong.
The firm is also eyeing a possible expansion into Texas to support its energy sector work, he said.
In a similar transaction last year, London-founded Allen & Overy combined with New York's Shearman & Sterling to create A&O Shearman, with nearly 4,000 lawyers.
New York firm Schulte, Roth & Zabel is currently in deal talks with larger Chicago-founded firm McDermott, Will & Emery. The firms said in early May that they are "actively finalizing" a merger that is expected to become official in the coming months.
The consolidation is driven partly by the idea that greater size and profitability gives firms a competitive advantage in attracting and retaining lawyers from a limited talent pool, said law firm consultant Kent Zimmermann of Zeughauser Group.
The departure of one or two key partners at a smaller and less profitable firm "can shake the confidence of the rest of the partnership more easily than when there's regrettable departures in firms with a much deeper bench of quality,' he said.
Law firm merger activity stayed relatively steady for the first quarter of 2025, with 22 completed deals compared to 21 during that period in 2024, according to consultancy Fairfax Associates.
Lisa Smith of Fairfax said there has been an uptick in cross-border mergers compared to a decade ago. There are 'more conversations and more serious conversations' about such deals, she said.
Still, consultants said there remains only a small pool of UK-U.S. tie-ups that may ultimately make sense for some firms due to factors like gaps in profitability, cultural differences and client conflicts.
There have been several transatlantic deals in recent years, some of which have been more successful than others, said Tony Williams of UK legal management consultancy Jomati Consultants. Other London-founded firms like Freshfields, Clifford Chance and Linklaters have instead grown significantly in the United States by hiring from competitors in major U.S. cities.
Consultants said some of the firms that have grown through hires may be watching for the right opportunity.
"There's been no secret that a range of UK firms would be interested in an appropriate merger with a U.S. firm," Williams said.