Herbert Smith green lights October merger with Australia's Freehills
Herbert Smith and Australian firm Freehills are set to merge to create an £800m firm after receiving the go-ahead from partners today.
David Willis
Herbert Smith’s partner vote was done by secret ballot and had been going on for about 10 days, with votes being counted today, while Freehills’ partners voted at a meeting earlier today.
According to Herbert Smith partners voted “overwhelmingly in favour” of the merger. Herbert Smith required 75 per cent approval from partners while Freehills required 85 per cent. The combination, which will be called Herbert Smith Freehills, is still subject to regulatory approval and is penned to launch on 1 October.
The two firms will fully financially integrate and share a single profit pool, as revealed by The Lawyer last week (21 June 2012), but Herbert Smith managing partner David Willis declined to comment on the proposed remuneration structure and how profits would be split. Based on Herbert Smith’s turnover for 2011-12 and Freehills’ 2010-11 turnover, a merged firm would have revenue of around £826m.
David Willis and Freehills managing partner Gavin Bell will lead the merged firm as joint CEOs. The enlarged entity will have 2,800 lawyers, including 460 partners, across 20 offices in Europe, Asia and the Middle East. Willis said that the two firms had been in serious discussions about a merger for around six months, but exploratory talks had been going on for longer than that.
In a statement, Willis said: “We’re excited about bringing together two pre-eminent law firms to create a new and distinctive global law firm. We share with Freehills a strong belief that over the next few years the market for premium legal services will become increasingly dominated by a small number of truly global firms. This merger will therefore put us in a strong position to provide clients with the single global offering they increasingly demand.”
Bell added: “The merger will give Herbert Smith Freehills the platform to become the leading global law firm across Asia Pacific, a region likely to see continued substantial growth and to become an increasingly important part of the global legal services market. Establishing from day one a single, integrated firm will give all partners the incentive to work together toward a set of shared goals and ensure a seamless service to clients.”
The Lawyer first reported that Herbert Smith was looking at a merger in Australia in May 2011 (16 May 2011).
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Readers' comments (39)
Anonymous | 28-Jun-2012 11:23 am
By far the best litigation shop in the UK, Asia-pac and Australia, as well as the best M&A team in Australia.
Should go alright...
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Anon | 28-Jun-2012 11:51 am
Well done for showing some guts and getting this done properly. This merger is an essential step for both firms to avoid not just mediocrity but a steady slide into irrelevance and terminal decline.
Further moves will of course be required though, such a building a proper presence in China and the United States.
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Anonymous | 28-Jun-2012 12:32 pm
mediocrity + mediocrity = mediocrity
sorry. this merger doesn't change reality
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in the know | 28-Jun-2012 1:24 pm
anonymous @ 12.32 obviously doesn't have a clue what their talking about. Since when was a leading firm in a jurisdiction mediocre!
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Name | 28-Jun-2012 2:11 pm
"Herbert Smith Freehills" is a bit boring. Think I would've gone with HerbHills or FreeHerbs.
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Anonymous | 28-Jun-2012 2:14 pm
Fabulous news!!! I work in Support at Herbert Smith and feel incredibly proud that a firm that feels like family has today expanded that family. The mood is positive and we look forward to a lovely relationship with Freehills.
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anon | 28-Jun-2012 2:20 pm
FreeHerbs sounds like a hippy commune. Maybe if they open a Nimbin office...
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Anonymous | 28-Jun-2012 2:46 pm
Well done to both firms for pulling off a full merger, something which few of the other recent Aussie tie-ups have matched. A momentous step for both firms which was necessary to show that they were not oblivious to the changing times or expectations of clients. As another comment has said, they cannot rest there but it is often the case that the first step is the hardest. Anyone talking about mediocrity is ill-informed.
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Anonymous | 28-Jun-2012 2:53 pm
I thought they were going with Freebies. That's the name I keep hearing over and over when the merger comes up.
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Anonymous | 28-Jun-2012 3:00 pm
Best before commeting, wait and see how it goes.
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In the Know | 28-Jun-2012 3:04 pm
Hmmm... Declining profits, numerous high profile partner departures, over half of the partnership now non-equity, booted out of the "Magic Circle" by LegalBus last month, failed alliance in Europe, etc. Yep. Herbies is definitely mediocre.
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Professor | 28-Jun-2012 3:11 pm
Get your maths right!
Mediocrity + mediocrity = 2Xmediocrity!
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Anonymous | 28-Jun-2012 3:13 pm
Sorry - what superior firm does Anonymous 12.32 work at?? Just wondering...
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Herbies Partner | 28-Jun-2012 3:16 pm
This is great news! It means our antiquated lockstep is finally dead! Thank you Jonathon and David for finally managing to kill it - even if you did have to take a back door approach.
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Gordon Gekko | 28-Jun-2012 3:28 pm
How do I feel about the merger? Mixed emotions, buddy. Like David Willis going off a cliff in my new Maserati.
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now now | 28-Jun-2012 3:39 pm
Let's be fair. Herbies has a good litigation practice. The rest of the firm may be mediocre but the litigation practice is strong - at least the litigators who haven't yet left the firm.
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Curious | 28-Jun-2012 3:42 pm
Why was Herbert Smith's partnership vote done by secret ballot? Was their a concern that partners might suffer retribution if they did not support the merger?
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what?!? | 28-Jun-2012 3:45 pm
Herbies was booted out of the magic circle by Legal Business last month?!? I am shocked to hear that they were ever in the magic circle. I thought every one considered them to be silver circle at best.
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where does Anonymous 12.32 work? | 28-Jun-2012 4:05 pm
What superior firm does Anonymous 12.32 work at? Who knows. Could be any of a number of better firms - Slaughters, Linklaters, Freshfields, Clifford Chance, Allen & Overy, Dewey Lebeouf...
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Ronald McDonald | 28-Jun-2012 4:10 pm
Bell's comment is ridiculous. Saying the merger will give the firm "the platform to become the leading global law firm across Asia Pacific" is like saying McDonalds is the leading global restaurant across Asia Pacific.
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