My favourite current rumour is the one of merger talks between Linklaters and Sullivan & Cromwell. As always, Linklaters is cast as the supplicant. It's a bit of a hardy perennial this one, rooted in the firms' once-close working relationship. After Linklaters absorbed a bunch of Continental firms in the early part of the decade it thought that its overtures would be welcomed in New York.
Indeed, Sullivan was also on the little list of firms drawn up by Terence Kyle in the early part of the decade. Kyle's mission was a failure. Linklaters' subsequent decision to beef up in New York led to a marked cooling of its relationship with Sullivan in particular.
Despite Linklaters' respectable enough New York presence, it's still not set Manhattan alight; the recent management changes in the US underline Silk Street's impatience that New York is still not where the firm wants it to be. Indeed, most senior Linklaters partners admit privately that merger is the end game. They are no doubt taking their cue from senior partner David Cheyne, who has long been sceptical of the dilutive nature of the investment required by the New York operation.
The big transatlantic merger is not a chimera. Next week we publish The Lawyer Transatlantic Elite 2008, in which we analyse the dynamics at the top of the US and UK markets. We pick out the group of firms that will shape the nascent transatlantic market and benchmark the top group of London and New York firms.
It's undeniable that the elite US and UK firms are no longer working in parallel markets. There is nothing that Linklaters or Freshfields would like better than getting the right US merger. With Freshfields it remains theoretical. With Linklaters there is the distinct possibility that something will happen. Certainly, pulling off this sort of deal would crown Simon Davies as the boldest managing partner of any UK firm since… well, Tony Angel. Why else is he trimming Germany and Central and Eastern Europe? Davies is showing steel, and it's with a long-term aim; Linklaters is looking more and more like a US version of a global firm. Execution is all.