London-based Allen & Overy has coveted a presence in Texas to boost its global energy practice.
On Sunday, it got it.
A&O and Shearman & Sterling, a New York-headquartered corporate law firm with 60 lawyers in Austin, Dallas and Houston, announced Sunday that they are merging.
The combined firm will be called Allen Overy Shearman Sterling and will employ more than 3,800 attorneys in 49 offices worldwide. The two firms combined generated $3.4 billion in revenues in 2022.
Shearman grew from 74 lawyers in Texas in 2021 to 77 last year, but the firm lost some attorneys in the second half of 2022 and in 2023, including M&A partner Omar Samji who joined Weil Gotshall in April.
But Shearman still has several powerhouse M&A lawyers in Texas. In March, a team that included Houston partners Robert Cardone, Alain Dermarkar and Scott Cohen represented German-based software giant SAP in a $7.7 billion sale of shares to Qualtrics Inc.
The Texas Lawbook’s Corporate Deal Tracker, which monitors M&A transactions by Texas lawyers, shows Shearman’s Texas attorneys worked on 45 deals in 2022 with a combined value of $10.6 billion.
Kent Zimmermann, a law firm consultant with Zeughauser Group, told The Lawbook Sunday that it will be “several months before we know” if the Allen & Overy merger with Shearman will have any impact on Texas.
“Two common ingredients of successful law firm combinations are shared strengths and shared aspirations for the future,” Zimmermann said. “Many firms with strength in energy benefit from growing in Texas, where a huge amount of money is spent on legal services related to energy, both oil and gas, transition to renewables and adjacent areas such as project finance and infrastructure.”
Shearman entered the Texas market in March 2018 by hiring 20 lawyers from Andrews Kurth for an Austin office. Two months later, the firm launched a Houston office with partners from Baker Botts, Jones Day and Thompson & Knight. Shearman officially opened its Dallas office in 2020.
Shearman’s revenues in Texas jumped from $42 million in 2018 to $102.9 million in 2021 but then declined 6.2 percent in 2022 to $96.7 million, according to The Texas Lawbook 50, which tracks revenues by law firms operating in Texas.
The partners at both law firms must vote to approve the merger before it is official.