We’re creating a firm like no other

Let’s start with the big news! It’s seven months since the merger of Allen & Overy and Shearman & Sterling to create A&O Shearman. How’s it going so far?

Khalid: It’s been an exciting time, and we’d have to say—so far, so good.

What’s been transformed by the merger is our market position. Our value to clients lies in combining the scale we now have with our outstanding capabilities across geographies, practice areas and sectors.

Over these first few months, getting partners and teams together, getting to know each other, and going to see clients together have been among our main priorities—and have been so uplifting. Physically the offices are coming together. All the office integrations are completing on, or ahead of time, within budget and without taking any additional space.

We’ve also been working on defining our firmwide strategy, which is built around the fundamental thesis of the merger—to create a firm like no other, unlocking the power of our unparalleled global platform so that we’re positioned to help the world’s most significant businesses navigate an increasingly complex legal and regulatory environment.

And we’re already winning mandates that neither legacy firm would have achieved on its own. Clients are choosing A&O Shearman for our combined and unrivalled platform.

A great example is when we acted for Exscientia, the UK-based pharmatech company, in its proposed merger with the U.S.-based Recursion, a technology-enabled biotech company, to create a leading technology-first, end-to-end drug discovery platform. Both Exscientia and Recursion are listed on Nasdaq.

The complexity of this deal required a powerful, multidisciplinary, transatlantic team, drawn from both legacy firms, to provide expert advice, making us the clear, single-firm choice for counsel.

Working on the merger from the early days, I could see the potential of this combination was just phenomenal. It’s such a great privilege to be working shoulder to shoulder with Adam and Hervé, as well as many others across the firm, to capture the opportunity that lies ahead for us.

Adam: The response from clients has been tremendously positive and completely matches the thesis we had when we put the transaction together—to serve global businesses that want to use one firm for their most significant opportunities and risks, with no compromise on quality or depth of service.

One large client predicted the combined firm would become “a powerhouse,” another called the merger “a game changer in the industry,” while a third said: “My two favorite firms are joining hands. Now I have no excuse to give business elsewhere.” Such terrific endorsements!

For me, it’s been gratifying to translate that merger concept into action and apply it for the benefit of clients. A big financial institution, for example, has retained us to become their global antitrust counsel, providing them with seamless advice wherever they do business.

Another has retained us to play the same role for all climate-related matters. It’s exciting to get a phone call from a client asking for an esoteric but important capability in a far-flung region where legacy Shearman & Sterling did not have a physical presence before and being able to say: “Yes—we’ve actually got one of the leading practices in the market for that!”

During these early days, we’ve found that working together on client pitches and matters execution has been the strongest accelerant of our integration.

What lawyers love most is to be in front of clients and working on interesting projects. By doing that together, we’ve shown that our service styles are compatible and complementary, just as we’d hoped.

Hervé: We’re seeing how the merger has energized people across the firm, including partners, associates, and business teams. They’re all relishing the opportunity to work in a bigger environment for new clients and with new colleagues.

Our first global partner conference, held in Copenhagen in June, was extraordinary. Having 800 partners physically together, you could feel the energy to the point where we said: “This is actually amazing!” And we’ve seen that energy ripple out not just across the firm but to clients too and to some of our competitors, who have reached out to say what we’re doing is incredible.

Creating a merger involves a lot of change as you develop your strategy. How is that going? 

Hervé: Our aim was to create a unique global platform, based around our network of nearly 50 offices, that allows us to grow in the areas that are right for us and for our clients. To do that means looking at the size and shape of the business to ensure it aligns with that strategy.

The merger is all about providing better service for our clients, which means being structured to address the needs of clients now and in the future. Our aim is to understand our clients’ needs and make sure their priorities are our priorities.

The senior leadership team constantly engages with clients, including at C-suite level, and I can confirm that clients see the combined firm as a very compelling offer.

Adam: The integration planning work we were doing both prior to closing on May 1 and since, has focused on the shape we want the firm to be in after three to five years, so that we’re optimally positioned to serve clients and achieve the level of profitability needed to attract and retain the best legal talent.

Khalid: We anticipated that the fit between the two legacy firms would be great and so far, the integration is going well.

Tell us a little more about how you are organizing yourselves to target those key priority markets and sectors.

Hervé: We go to market through a matrix of global practice groups and industry sectors. Global practice groups serve clients on multijurisdictional matters, making sure we collaborate effectively and provide a consistent offer to clients across regions. To deepen relationships with businesses worldwide, we have six key industry sectors—energy and infrastructure, established industries, financial institutions, life sciences and healthcare, private capital, and technology—that operate across practices, products and geographies.

We’ve appointed sector leads and client relationship partners for each of the priority areas and the focus we’re bringing to them is already resulting in great client wins. The teams are formulating business plans and identifying priority clients, working out how best to share knowledge and collaborate across regions and practice areas, creating a common culture for the benefit of our clients.

We’ve asked all the teams to be highly ambitious and to think outside the box, put collaboration at the center of everything they do, take advantage of our unique global coverage and showcase the full range of our capabilities to clients.

Adam: Private capital is a prime example. We’ve organized our coverage to encompass partners across different practice areas, for instance in the private equity and M&A teams, our ENRI group focusing on energy, natural resources and infrastructure, and in other critical areas such as leveraged finance, derivatives and disputes. And we’ve brought them together to be in front of the leading private capital firms, whether that’s traditional private equity funds, credit-focused funds, direct lenders or sovereign wealth funds.

Our unique platform is also helping us make important lateral hires to bolster our capabilities. For example, between May 1 and September 30, we made ten important lateral hires, in key markets including London, the U.S., France and Italy, including a market-leading private equity team. All this is allowing us to support the largest private capital firms in the world as well as rising players who are winning the middle market. Why? Because we’ve created a uniquely global and interdisciplinary destination for private capital work—and we’re far from done.

Khalid: We’re supporting this work by building up our thought leadership in these priority areas, for instance creating a private capital insights hub and staging forums across Europe to highlight evolving market trends. We hosted a memorable event in London to celebrate emerging female talent in private capital. It was a great forum for our associates to link with clients and develop networks across the industry. And we were so proud to be named law firm of the year in the Private Debt Investor Awards—an accolade voted on by our clients.

You announced several business changes in September; can you explain the rationale? 

Adam: As part of the post-merger integration, we identified where there was overlap and overcapacity, as well as synergies, to ensure the business maximizes opportunities with the highest growth potential, aligned with the firm’s strategic vision and clients’ needs.

The reshaping measures we announced are designed to fulfill our ambition to be the firm of choice for the world’s leading global businesses. They will position our business for long-term success by prioritizing industry coverage, achieving the right business and client mix, and fine-tuning the combined firm’s global footprint.

Hervé: The business changes followed a broad strategic review which identified those priority areas the firm will focus on to harness the full potential of the merger, deliver unparalleled client service, and provide the best opportunities for our fee earners and business teams.

2024 has been a year of intense geopolitical challenges and counting economic uncertainty. How do you think these will impact the business? 

Khalid: Global businesses, including the legal industry, are facing challenges on so many fronts right across the world. But what’s so striking is the scale and pace of change we’re witnessing. It’s unprecedented.

As a business, A&O Shearman is extremely resilient. We’re well-hedged in terms of our transactional, advisory, restructuring, insolvency and disputes work, so that we do well both when markets are buoyant and when they’re more challenging. Importantly, given our global footprint, we’re better placed, I think, than any other firm to turn challenges into opportunities. 

Whether clients are navigating geopolitical risk, increased regulatory scrutiny, foreign investment controls, AI, cybercrime or climate change, they can turn to us as the only global firm able to serve them across geographies in a truly elite and integrated way. We are, for instance, in a unique position to understand the interplay between regulatory authorities, national courts, trading blocs and diverse business cultures in a multitude of geographies. That puts us in a very strong position.

Adam: There’s been big change. When we speak with general counsels and boards, geopolitical concerns and opportunities, alongside AI, top the list of issues they want to discuss, more so than at any time I can remember. That’s not surprising given the conflicts we’re currently witnessing, and in a year when we’ve seen so many important and unpredictable elections taking place across the globe, not least in the U.S., all of which can create significant complexity for our clients. There are very few firms that can provide the comprehensive legal advice and solutions our clients so clearly need right now.

Hervé: Complexity plays to our strengths and scale. We had a client recently who wanted a survey of energy transition legislation in 50 different jurisdictions, and we knew that about 40 of our offices have expertise in this area. Our job is to make sense of those complex challenges and simplify them for our clients

You mentioned AI as one of the biggest challenges clients are facing. This is an area of strength for the firm, isn't it? 

Adam: Most conversations with business leaders these days turn very quickly to the subject of AI, particularly around understanding how AI is impacting their business and what it will mean for the delivery of legal services. There will be winners and losers between the firms adapting to this new technology and those that fail to do so. We’ve positioned ourselves emphatically as an adapting firm, leading in this area and investing in it aggressively.

Hervé: We’re already advising on many AI-related matters through our market-leading, multijurisdictional AI advisory practice. In part, that’s down to the work we’ve done to integrate AI responsibly into our own practice. Because we’ve developed and deployed AI systems ourselves, our legal advice on AI is informed by deep technical expertise and an understanding of what works in practice, something that has been widely recognized.

In December 2022, we became the first firm globally to deploy generative AI at enterprise level via Harvey, the GPT-4-based large language model (LLM) that has been fine-tuned for law.

A year later, we launched ContractMatrix, our AI-powered contract drafting and negotiation tool, in a first-of-its-kind partnership with Microsoft and Harvey. It’s the pioneering work done by our Markets Innovation Group (MIG), in collaboration with our in-house legal, IT and InfoSec teams, as well as with our innovation leads and knowledge lawyers, which has positioned the firm at the forefront of AI development and deployment.

Khalid: We’re continuing to innovate at pace and new AI-powered products are on the horizon. It was largely in recognition of this groundbreaking work that we were named the most innovative law firm in Europe at the FT Innovative Lawyers Awards Europe 2024. We also won the award for innovation in generative AI tools for ContractMatrix.

Being at the forefront of AI adoption is motivating young lawyers to join us. It’s a key differentiator.

You are committed to A&O Shearman being a responsible business and have identified key values to support that, one being sustainability. What are the opportunities and internal considerations around that? 

Hervé: Sustainability and energy transition are high on the agenda for many of our clients and our capabilities in this area have grown exponentially in recent years. We have a transatlantic team of 250 energy transition specialists that has advised on projects in more than 35 jurisdictions, working with clients in sectors as diverse as power, shipping, aviation, automotive and manufacturing. 

We now need to increase investment to make sure we win our share of this important work. There will be increasing amounts of M&A work, for example, with clients looking to acquire wind and solar assets. We also expect to see a growing number of disputes in this area. So, our work here, as in other areas, will involve not only transaction support, but also strategic advice and support in settling disputes.

Khalid: There’s another side to our approach to sustainability—aside from client work—which we think is second to none.

It’s the work we’re doing to reduce our own impact on the environment, something we’ve been committed to for some time. That includes looking closely at our supply chain, which makes up around 85% of our carbon emissions, holding suppliers to account while also looking to control our more immediate emissions, for instance through travel. 

Adam: We’ve set a goal of reducing our footprint by 50% by 2030 using a science-based targets approach and we report our emissions to hold ourselves accountable.

Diversity, equity and inclusion (DE&I) is a key strategic priority. Are you continuing to make progress in this area?

Khalid: We have the largest global footprint of any firm and that makes us the most diverse in terms of the people we employ and the communities we work in. That means we also have to be the most diverse-thinking law firm and the market leader in DE&I.

We’ve set ourselves ambitious goals, including a target to get 50% female representation at all levels, including the most senior. Currently, 26% of our partners are women and this year 42% of partner promotions were women. Women make up just under 40% of our newly appointed ExCo. We have female representation in many leadership roles, including our managing partner in the U.K., Denise Gibson, and our co-managing partner in the U.S., Doreen Lilienfeld. We’re making good progress but need to go further and faster. 

Hervé: This is so important to us and we’re actively thinking about diversity in its widest sense, whether that’s gender, ethnicity, our LGBTQ+ colleagues, supporting neurodiverse colleagues, those living with disabilities or from disadvantaged backgrounds. Diversity is a factor in all the decisions we make, whether that’s partner promotions, lateral hires, graduate recruitment or putting client teams together. We also have regular conversations with clients about diversity and share our best practices with them.

Adam: Creating a truly diverse and inclusive firm is a top priority shared across the firm and everyone has a role to play in making it happen. The good news is that this shared commitment to DE&I has been another accelerant to the integration of our two firms. For instance, events we hold around Black History or Pride months create instant connections and a powerful sense of belonging.

You are also championing mental and physical wellbeing initiatives. Why is this so important?

Khalid: Helping people to optimize their performance in a sustainable way is critical to our success. For this reason, we aim to create a work environment that promotes wellbeing. When people feel at their best, they can perform at their best. In practice this means giving people the chance to be involved in engaging and rewarding work with the right balance of rest and recuperation.

Adam: We’re taking concrete steps to re-enforce this message. We dedicated a full-partnership session at the partner conference in June to wellbeing. We promote healthy ways of working and seek to remove unnecessary sources of stress. We encourage people to voice their concerns and speak openly about issues they face, and we provide access to wellbeing benefits, education and training, helping people to take preventative steps to support their own wellbeing and build resilience.

Hervé: A global wellbeing advisory board, led by partners, shapes our strategy, which is measured against wellbeing key performance indicators. We’ve also appointed mental health advocates who sponsor our global Minds Matter program, and 300 mental health allies are working across our offices. They’re trained to support colleagues and point them towards wellbeing resources when they need them. Again, this is a work in progress, but it’s a top priority for us.

Does the commitment to social impact work—whether through pro bono, charitable giving or volunteering—continue as strongly as ever?

Khalid: More than that—it’s continuing to grow, and the figures to support that are truly impressive. We recorded more than 81,000 hours of social impact work by our lawyers in 2023, with a staggering 77% of colleagues participating globally. That’s an increase of 35% in the number of colleagues participating in 2022. 

We’re delighted to be supporting Women for Women International as our global charity partner. It works to help women survivors of war and conflict rebuild their lives. I feel lucky to have had the chance to visit them and see their work in Rwanda, a special trip that I found very uplifting.

Adam: Partners contributed a total of GBP3.34 million to charitable funds during the year, almost half of that via the Allen Overy Shearman Sterling Foundation, which provides grants to non-profit organizations worldwide.

Hervé: I think a lot of colleagues appreciate the chance to make a difference in wider society as part of their day-to-day lives and, again, we actively encourage them to do so. For instance, we now allocate a number of hours dedicated to social impact to our fee earners’ targets. 

We strongly encourage all colleagues to use their skills to make a positive impact on communities, with a particular focus on equal access to justice, especially for low-income people and non-profit organizations, and access to education and employment. We have social impact programs running in every region and our pro bono practice is multijurisdictional. This work is central to our determination to be a responsible business.

The merger, of course, means that two alumni networks have also come together. Why is that important?

Adam: We now have a second-to-none network of around 26,000 people who are maintaining strong connections with the firm. That adds up to a uniquely impactful community with a sense of pride in having spent a meaningful part of their careers at our legacy firms. It’s absolutely critical that our merger strengthens—rather than dilutes—those connections. That’s one of the reasons we hosted significant alumni events in 2024.

Khalid: Judging by the number of people who continue to be a part of the network, our alumni clearly feel the same way that we do, and we’re delighted that is the case.