When troubled New York regulation agency Shearman & Sterling’s merger talks with its transatlantic rival, Hogan Lovells, collapsed in March, Shearman’s Adam Hakki knew who to name.

Days into his position as senior companion final month, Hakki picked up the cellphone to ring Wim Dejonghe, the long-serving chief of Allen & Overy, certainly one of London’s elite magic circle regulation corporations. In a matter of weeks, the 2 had been cloistered in a Manhattan workplace hashing out a $3.4bn merger, which — if voted via — will likely be one of many largest the trade has ever seen. 

For Belgian-born Dejonghe — A&O’s first overseas senior companion and earlier than that, managing companion — a tie-up with a Wall Road agency would be the fruition of a two-decade-long undertaking to crack probably the most profitable authorized market on the earth, leaving its British rivals within the mud. For Shearman, it provides a route out of a torrid interval of companion exits and troublesome restructuring.

“I’ve recognized Shearman for a very long time. [Hakki] received into the position [and] he knew we had been ,” Dejonghe, 62, advised the Monetary Instances. “The preliminary dialog was between me and him. After a lot of conferences between the 2 of us, we thought: ‘this would possibly work, truly’.”

Shearman, a storied 150-year-old agency that when suggested the cream of company America, is the far smaller entity, with $907mn in revenues final 12 months and about half of A&O’s greater than 40 places of work. Nevertheless it has lengthy been on Dejonghe’s dance card as a possible suitor due to crossovers in banking and finance.

“It grew to become obvious in a short time that there was a shared imaginative and prescient for what this mixture might be and a capability to behave decisively,” stated Hakki. “We’ve been massively impressed with Wim and his staff.”

Each corporations had additionally discovered classes from earlier failed mergers: in A&O’s case, collapsed talks with California-headquartered O’Melveny & Myers, which floor to a halt in 2019 after 18 months of negotiation.

“We knew [if] this leaks earlier than we go to our companions, we’re lifeless,” stated Dejonghe. “So we agreed the one approach we might ship one thing to [partners] was to sit down collectively in a room for weeks and hammer out all the small print.”

With a small core staff — together with advisers from heavyweight Wall Road regulation corporations Simpson Thacher & Bartlett, and Davis Polk & Wardwell — Hakki and Dejonghe decamped to funding financial institution Lazard’s places of work in Manhattan to tug collectively what would land on Sunday as a slick announcement, full with web site, shopper FAQs and video. 

Dejonghe’s predecessor, David Morley, credit him for the velocity of the Shearman talks, which had been executed inside weeks. “Only a few folks might have carried out this, however Wim has had this clear strategic imaginative and prescient for a very long time.” 

Morley, who led the agency alongside then-managing companion Dejonghe for eight years to 2016 says: “Wim didn’t get up yesterday and say: ‘it’d be nice to do a merger’…. The agency has been fascinated about and debating it for no less than 20 years, and choices . . . In order that they had been prepared to maneuver actually rapidly when this got here up.”

Morley and Dejonghe, seen as a modernising pressure at A&O, spent years pounding the pavements in New York and on the US west coast within the wake of the monetary disaster, eating with regulation agency leaders in powerbroker hotspot Estiatorio Milos in Manhattan.

“Some folks would see us,” says Morley. “Others had been scared of even being seen in a restaurant with us in case their companions noticed us or it received into the press . . . We weren’t asking folks: ‘would you like a merger?’ — simply constructing relationships and gaining perception.” He stated this meant Dejonghe had constructed up a “fairly good Rolodex of American corporations”.

A&O has lengthy had places of work within the US. However rising there has not been plain crusing. Like its worldwide rivals, A&O has struggled to interrupt right into a market dominated by a pack of extremely worthwhile home corporations with larger firepower to pay star companions. Wall Road’s prime corporations are usually tightly targeted, with solely a handful of worldwide places of work and a pipeline of profitable personal fairness and finance work.

In contrast, A&O and its magic circle friends within the UK have sprawling international networks, providing shoppers a far wider number of work. That has made them one-stop outlets for a lot of firms, however much less worthwhile than their US friends. Companions at Wall Road corporations comparable to Simpson Thacher and Davis Polk took residence greater than $5mn on common final 12 months, for instance, whereas M&A powerhouse Wachtell Lipton Rosen & Katz companions pocketed greater than $7mn. In distinction, A&O’s companions took residence £1.95mn ($2.4mn) on common final 12 months.

Tony Williams, a advisor who was managing companion at Clifford Likelihood when it merged with American agency Rogers & Wells in 2000, stated: “The magic circle have been challenged within the final decade by the energy of the US financial system . . . And Brexit didn’t assist: sterling is now at $1.23.”

One former high-ranking A&O companion stated: “Each magic circle agency has been trying to come into the US marketplace for the final 30 years, and a merger has at all times been probably the most logical approach nevertheless it’s extraordinarily troublesome to do. The highest American corporations have at all times been rather more worthwhile, which for them is a proxy for excellence.”

He added, “Shearman has had some difficulties over the previous few years, and all of a sudden they had been accessible and there’s a chance for a match.”

Huge variations in companion pay made it troublesome for UK corporations to compete within the US, an issue compounded by the stronger greenback. Because of this, beneath Dejonghe, A&O has step by step chipped away at its so-called lockstep pay construction, the place companions are paid in accordance with time served, to pay star performers extra.

Dejonghe, who one other former companion described as “charismatic and entrepreneurial”, is not any stranger to abroad mergers, the place marrying two totally different cultures is significant to success. The company lawyer, who has 5 sons, joined A&O when it tied up with a part of Loeff Claeys Verbeke — a Brussels-based agency Dejonghe led as managing companion.

He stated the Shearman merger is a “merger of equals” in the identical approach as that deal. “You may’t say to your future colleagues, we’re buying you,” he stated. “That’s not the mindset . . . It doesn’t work like that.” 

Changing into managing companion at A&O meant leaving Belgium’s cobblestoned streets and its many biking races. Dejonghe, who cycles to A&O’s Spitalfields workplace every day, is a veteran of newbie occasions together with the Etape du Tour and the Tour of Flanders.

“I’ve sat in his slipstream going up and down mountains for a few years,” stated Morley. “We used to tease him that he was good on the flat . . . He used to retort that in Belgium you’re at all times biking towards the wind. We had been at all times joking with one another; it was type of a metaphor for the way in which we labored collectively.”

“Hills are usually not my favorite to be sincere,” Dejonghe conceded. “Give me the Tour of Flanders anytime.” 

The Shearman deal forward of him is prone to be a problem of a really totally different type, and probably the head of his 15 years on the prime. However Dejonghe is sanguine: “I’ve at all times had a forward-thinking mindset. I’m in all probability a bit extra optimistic than some legal professionals.”