How's the merger going? A look into Shearman & Sterling's Partner exits

11 March 2024

A few weeks ago we published an article looking at which AM Law 100 firms have been the best at retaining their lateral Partner hires. In last place, with a retention rate of 60% (between 2020-2023) was Shearman & Sterling. Presumably, the upcoming merger with Allen & Overy has been a major factor in the firm's more recent Partner departures.

So this got us thinking, how many Partners have left the firm since the A&O Shearman merger was announced back in May 2023, and have there been more or fewer exits than in other recent mergers?

Shearman & Sterling has lost 9% of their Partners since the merger was announced

Allen & Overy has lost 3% of their Partners since the merger was announced

Shearman are losing more Partners than expected, when comparing to other recent mergers

The average decrease in Partner headcount among our comparison sample* of mergers is 4%.

As A&O Shearman, the merger is on par with the expected number of Partner departures, having seen a 4% decline in combined headcount since the announcement. But separated, Shearman & Sterling has lost 9% of their Partners to Allen & Overy's 3%. As is stands, Shearman has suffered a higher rate of Partner exits than any other firms in our comparison sample, while Allen & Overy has maintained an expected attrition rate for a firm undergoing a merger.

The merger is set to be complete by May 2024, so these figures could increase should more Partners leave over the next few months.

*Sample of comparison mergers: Bryan Cave <> Berwin Leighton Paisner (BCLP), Clyde & Co <> BLM (Clyde & Co), Faegre Baker Daniels <> Drinker Biddle & Reath (Faegre Drinker), Troutman Sanders <> Pepper Hamilton (Troutman Pepper), and Holland & Knight <> Thompson & Knight (Holland & Knight)

Most of Shearman's Partner departures have taken place outside of the United States

There has been a 13% decrease in Shearman's non-US Partner population, compared to a 6% decline among US based Partners.

The highest total number of exits have been in Paris and London, where 4 Partners in each office have left since the merger was announced. The Bay Area and Austin have registered the highest departures among Shearman's US offices.

"When contemplating a combination, firms must be mindful of how the two legacy firms will evolve to become “one firm” and ensure they retain their valuable talent.

Successful firms always start with a sound strategy before attempting a combination, taking the time to reflect on what their culture is, and what their “personal brand” is that defines them as part of their strategy planning process. This sentiment is echoed in the Thomson Reuters Institute’s research that shows that the strongest drivers of lawyer engagement are the firm’s direction and its leadership."

Tom Snavely | Thomson Reuters

Written using data from Pirical Legal Professionals (PLP)

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