Freehills partners agree to global mobility; Herbert Smith set for modified lockstep as poll result imminent
Herbert Smith and Freehills are set for full financial integration if the two firms’ partnerships vote to combine, with the result of the poll widely expected next week.
The proposal of full profit-sharing merger will be seen as a radical move by Herbert Smith as it represents a definitive break with any alliance strategy. Last year it ended its European alliance with German firm Gleiss Lutz and Dutch firm Stibbe following the Continental firms’ decision not to take the decade-long relationship any further.
It is understood that Herbert Smith, which set in motion a review of its lockstep last year as part of Project Blue Sky, is likely to opt for a modified lockstep, much as operated by Freehills. “It’ll be a single economic merger and a single profit pool,” said a source.
Other details of the deal between Herbert Smith and Freehills include a commitment by Freehills that its partners should be prepared to be mobile across the network – signalling a planned push into China.
Up until now the firms that have combined with Australian practices have opted for arms-length tie-ups. Linklaters will maintain separate profit pools in its agreement with Allens Arthur Robinson (AAR). The two firms have formed a joint venture (JV) bringing together their Asia-focused energy, resources, and infrastructure lawyers and will share revenue on a matter-by-matter basis.
Last year Freehills turned over A$511m, according to Australia’s BRWMagazine.