So Linklaters & Alliance has finally come out with it. The partners want a US merger, so off goes new US managing partner Terence Kyle to find one for them. Surprised? Thought not. Asking whether UK firms want US capability is rather like the old question about bears and woods. Most of the top-10 firms recognise that they need some sort of presence in the US, which is the last great untapped market as far as UK practices are concerned. But this is the first time that any major law firm has been quite that blatant.
With his term as chief executive of the Alliance coming to an end, Kyle is an obvious choice to head Linklaters' Atlantic push. What do you do with a senior individual who needs a new role? The sceptic might say: “Give them an impossible task and let them get on with it.” But in Linklaters' case there was nowhere else to put someone of Kyle's energy and experience – the Asia and London posts were filled, after all.
Apart from the worry that by announcing an intention to merge it stymies recruitment in New York, Linklaters' timing may turn out to be rather neat. With the US economy slowing down, there may be more appetite on Wall Street for hooking up with the Brits. There is no widespread desire for full merger, but the idea of localised alliances as co-counsel (see Ashursts' discussions with Fried Frank on structured finance) are suddenly becoming popular.
Although one insider told The Lawyer that Linklaters is keen on the usual candidates such as Davis Polk & Wardwell and Simpson Thacher & Bartlett (come on chaps, let's have a little more imagination, shall we? How about Paul Weiss for a change?) one suspects that in the end, the firm may exercise some pragmatism.
As one Linklaters partner says darkly: “Half my partners who want a merger with someone like Sullivan & Cromwell would be the ones who'd be pushed out afterwards.” Unlike Freshfields, which would have serious cultural difficulties doing a deal with anyone outside the Wall Street top four, Linklaters – for all its sniffiness about the Clifford Chance deal with Rogers & Wells – is equally likely to take on a smaller Wall Street player and grow its US presence from there.
Mind you, the perception in some areas of Wall Street is, in the words of a senior US partner, that Linklaters has “sacrificed quality for European coverage”. Rather unfair, given how Linklaters has streamlined Oppenhoff & Rädler in particular, but it is a perception Kyle will have to overcome fast.