(A&O) approached Freshfields Bruckhaus Deringer for a merger earlier this year, The Lawyer can reveal, as the former moves its strategic planning to a new level.
The informal approach, made in April and rebuffed by Freshfields, came after a year of merger scenario planning.
A&O senior partner David Morley told The Lawyer: “We’ve looked at different kinds of scenarios – not just in terms of whether we should merge, but also what would happen if the legal landscape changed. You’ve got to be prepared for a change.”
A&O confirmed that the firm’s senior management had lunch with their counterparts at Freshfields, but Morley denied that there was any discussion of a merger. Freshfields declined to comment.
More than 100 partners are understood to have attended the merger scenario planning exercises. The sessions, which formed part of the the magic circle firm’s partner development programme, were held at the Judge Business School in Cambridge.
The Freshfields approach is a crucial admission by A&O that, in order to succeed as a global player, it must strengthen its corporate practice.
The firm has also decided on a major shift in its US strategy, which has historically focused
on growing its 30-partner New York practice organically.
One senior A&O partner said: “A US merger is one of the options that’s being considered. We’re more open-minded about a merger than we have been before.”
Morley said: “We’ve never ruled out a US merger as an option. We’re [now] thinking about it in different ways than we have done in the past.”
A&O’s average profit per equity partner (PEP) for the 2005-06 financial year was £788,000. In contrast, Linklaters, Freshfields and Clifford Chance posted PEP figures of £1.06m, £830,000 and £810,000 respectively.