The Big Law merger of McDermott Will & Emery and Schulte Roth & Zabel is a clear play for New York\u2019s lucrative legal market, but the leader of the combined firm is also seeking a transatlantic impact. <\/p>\n
\u201cStrengthening 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,\u201d said Ira Coleman, who will lead McDermott Will & Schulte after the tie up closes Friday.<\/p>\n
Chicago-founded McDermott\u2019s London office this year will pass the $100 million dollar mark in gross revenue for the first time, Coleman said. The combination with Manhattan\u2019s 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. <\/p>\n
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.<\/p>\n
Strength in New York and London is becoming more essential for top firms, according to legal recruiter Stephanie Ruiter. It\u2019s one of the things more partners are asking for in their lateral movements\u2014especially with those financial services-based practices, Ruiter said. <\/p>\n
\u201cFor the time zone perspective, you need someone in New York and you need someone in London,\u201d said Ruiter, who is the managing director of Macrae\u2019s New York office.<\/p>\n
The combined firm\u2019s London office will be led by McDermott dealmaker Aymen Mahmoud and Schulte\u2019s Josh Dambacher, according to Coleman. Mahmoud\u2019s past client list includes OpenGate Capital and Golub Capital. Dambacher regularly advises clients in the fintech industry. <\/p>\n
\u201cClients are demanding higher levels of service, more global reach, more of an understanding on how clients do business around the world,\u201d Ira Coleman said in an interview. \u201cBeing able to service that is really important.\u201d<\/p>\n
The New NYC?<\/p>\n
McDermott is setting its sights on the UK amid stiff competition from international firms. <\/p>\n
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\u2014two prominent firms that raided each other for UK dealmakers in recent years\u2014highlights the competitive pressures.<\/p>\n
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.<\/p>\n
\u201cThey came in and they disrupted the market and pulled people from the more traditional firms and were able to build up an amazing practice,\u201d he said. \u201cThat same thing is happening in London.\u201d<\/p>\n
Podcast:<\/strong> McDermott Chief Bets on \u2018Scale\u2019 With Schulte Merger<\/a><\/p>\n Law firms announced nearly 350 London partner hires in the first half of the year, 25% higher<\/a> than the five-year average for the same period, according to UK recruiting firm Edwards Gibson. <\/p>\n \u201cIt seems to be a very active market at the moment,\u201d Sloane Poulton, a London recruiter for Edwards Gibson, said. Demand for private equity work has underpinned the market, he said.<\/p>\n 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.<\/p>\n The firm\u2019s London revenue is a drop in the bucket compared Latham & Watkins, the US firm with the largest headcount and a frequent target<\/a> for talent poachers. Latham\u2019s London office generated $850 million<\/a> in revenue in the last fiscal year, according to The Global Legal Post.<\/p>\n McDermott has been adding to its London ranks ahead of the merger. <\/p>\n