The prominent Magic Circle law firms in London, including Freshfields Bruckhaus Deringer, Linklaters, Clifford Chance, and Allen & Overy Shearman, have significantly increased their presence in the U.S. market, positioning themselves among the top 20 mergers and acquisitions (M&A) dealmakers over the past year. This strategic expansion is catalyzed by investments in the United States, a priority market due to its size and the complexity of legal work available there.
According to Bloomberg, Freshfields initiated this strategic pivot back in 2019 with the noteworthy hiring of Ethan Klingsberg, a seasoned New York partner from Cleary Gottlieb. The goal was clear: tap into the world’s largest legal market and offer clients top-tier service comparable to what they experienced in London, Europe, and Asia. As Thomas McGrath, US Global Practice Head at Linklaters, phrases it, “It’s important for us to be able to serve our clients here with equal capacity.” Indeed, this shift comes after UK firms lost considerable ground to US competitors, such as Latham & Watkins and Kirkland & Ellis, who expanded aggressively in London by leveraging larger profit pools to offer highly competitive pay packages.
The strategic orientation has paid dividends, manifesting in a slew of high-profile deals. Freshfields and Linklaters recently advised on the Abu Dhabi National Oil Co.’s acquisition of Covestro AG, valued at €11.2 billion ($13 billion), while Freshfields together with Clifford Chance facilitated Deutsche Bahn AG’s sale of DB Schenker for €14.3 billion ($15.9 billion). In the U.S., Freshfields undertook Hewlett Packard Enterprise’s planned acquisition of Juniper Networks for $14 billion, and jointly with Linklaters, supported Johnson & Johnson’s acquisition of Shockwave Medical Inc. for $13.1 billion.
There are other notable moves. Freshfields focused its strategy significantly on the US landscape, doubling its headcount in America over the last five years. This shift in strategy and focus, as explained by Adil Lalani of search firm Macrae, reflects a change in power dynamics within these firms. Mediating a salary war became a pivotal element for UK firms aiming to secure their foothold in the American market.
Each firm has made impactful hires and deals to cement this strategy. Linklaters attracted George Casey and a team of New York-based M&A lawyers from Shearman & Sterling, with ambitions to double their current roster of about 200 lawyers in the U.S. Clifford Chance, seeing a 28% increase in its US revenues, opened a Houston office in June 2023, expanding into the lucrative Texas market. Similarly, Allen & Overy made headlines with its merger with Manhattan’s Shearman & Sterling, which contributed to its 19th rank in Bloomberg Law’s M&A league tables.
Meanwhile, Slaughter & May remains the only Magic Circle firm reluctant to push into the U.S., maintaining a smaller, high-profitability model centered on long-standing blue-chip client relationships, though there are hints that this approach may soon evolve.
Overall, the strategic push by these Magic Circle firms underscores the increasingly dynamic nature of global legal services, highlighting a reciprocal cross-Atlantic competition that reshapes both the European and American legal landscapes.