McDermott Looks to London After Merger With New York’s Schulte

The Big Law merger of McDermott Will & Emery and Schulte Roth & Zabel is a clear play for New York’s lucrative legal market, but the leader of the combined firm is also seeking a transatlantic impact.

“Strengthening our London presence with the merger significantly enhances our capabilities in the UK and Europe and reinforces London as a key hub in our European network,” said Ira Coleman, who will lead McDermott Will & Schulte after the tie up closes Friday.

Chicago-founded McDermott’s London office this year will pass the $100 million dollar mark in gross revenue for the first time, Coleman said. The combination with Manhattan’s Schulte, known for its investment management, private capital, and fund formation prowess, will help the firm compete in a hot UK market where US deals firms are jostling with each other after stealing market share from local rivals.

The merger will create a roughly 1,750-lawyer firm with more than 20 global offices, including more than 100 UK-based attorneys. McDermott Will & Schulte is expected to be among the 20 largest US firms by gross revenue, with the combining firms bringing in $2.8 billion last year.

Strength in New York and London is becoming more essential for top firms, according to legal recruiter Stephanie Ruiter. It’s one of the things more partners are asking for in their lateral movements—especially with those financial services-based practices, Ruiter said.

“For the time zone perspective, you need someone in New York and you need someone in London,” said Ruiter, who is the managing director of Macrae’s New York office.

The combined firm’s London office will be led by McDermott dealmaker Aymen Mahmoud and Schulte’s Josh Dambacher, according to Coleman. Mahmoud’s past client list includes OpenGate Capital and Golub Capital. Dambacher regularly advises clients in the fintech industry.

“Clients are demanding higher levels of service, more global reach, more of an understanding on how clients do business around the world,” Ira Coleman said in an interview. “Being able to service that is really important.”

The New NYC?

McDermott is setting its sights on the UK amid stiff competition from international firms.

Large US firms have used their scale and profitability to muscle into the local market, shifting pay structures to go after rainmakers. A recruiting war among Kirkland & Ellis and Paul Weiss—two prominent firms that raided each other for UK dealmakers in recent years—highlights the competitive pressures.

The situation is similar to what happened in Manhattan about a decade ago when Chicago-founded Kirkland made a huge push in the city, Coleman said.

“They came in and they disrupted the market and pulled people from the more traditional firms and were able to build up an amazing practice,” he said. “That same thing is happening in London.”

Podcast: McDermott Chief Bets on ‘Scale’ With Schulte Merger

Law firms announced nearly 350 London partner hires in the first half of the year, 25% higher than the five-year average for the same period, according to UK recruiting firm Edwards Gibson.

“It seems to be a very active market at the moment,” Sloane Poulton, a London recruiter for Edwards Gibson, said. Demand for private equity work has underpinned the market, he said.

McDermott is on pace for 10% year over year revenue growth from its London office, according to Coleman. Strategic hires in private equity, M&A, finance and restructuring, real estate, and litigation are driving that growth, he said.

The firm’s London revenue is a drop in the bucket compared Latham & Watkins, the US firm with the largest headcount and a frequent target for talent poachers. Latham’s London office generated $850 million in revenue in the last fiscal year, according to The Global Legal Post.

McDermott has been adding to its London ranks ahead of the merger.

The firm last year hired more than half a dozen partners, including senior partner Graham White, who will help run the combined London outpost. It also added a former Skadden tax partner in May. McDermott’s London-based head of structured finance jumped to Squire Patton Boggs in a similar role earlier this month.

New Digs

Coleman says private equity, real estate, and private credit are ideal areas to flex the firm’s transatlantic capabilities.

Schulte’s London office is currently led by Christopher Hilditch, a private funds lawyer who cofounded the outpost in 2002, and hedge fund lawyer Dambacher.

Lawyers from both firms will work from McDermott’s new London office space starting in 2028. The firm recently signed a 15-year lease on 115,000 square feet of office space across eight floors in the Mayfair section of London’s West End.

Coleman hopes the new space feels more like an high-end social club—open for clients to take meetings where they can have food and drinks without worrying about being overheard and decked out with luxe offices for attorneys.

“We’re moving to where a lot of the clients are and we’re building a space that we think is very hospitable to clients and hospitable to our talent,” he said.