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A&O Shearman, the newly merged firm of Allen & Overy LLP and Shearman & Sterling LLP, announced Friday that it plans to reduce its global partnership by approximately 10% as part of a sweeping cost-cutting initiative. This move comes as the firm seeks to streamline operations and maximize the synergies from its transatlantic merger.

A&O Shearman to Cut 10% of Partners : Partnership Cuts and Office Closures

The firm revealed that the partnership cuts will be completed by the end of its financial year, which runs until April 30. With nearly 800 partners in place after the merger, around 80 partners could be affected by these reductions. Along with the partnership cuts, A&O Shearman also plans to shutter its Johannesburg office, which was originally launched by Allen & Overy a decade ago. The office is expected to close by the end of December.

In addition to these measures, the firm announced the closure of its consulting business, Consulting by A&O Shearman, by the end of this calendar year. These changes come as part of broader efforts to ensure the merged firm is operating as efficiently as possible.

A&O Shearman to Cut 10% of Partners : A Difficult but Necessary Step

Hervé Ekué, managing partner at A&O Shearman, emphasized the challenges in making these decisions. “We are actively engaged in post-merger integration and already see the benefits of synergies and additional opportunities to assist our clients on high-profile international matters, which underpinned the rationale for the merger,” Ekué said in a statement.

He acknowledged the difficulty of the cuts, calling them a "difficult but necessary step forward." Ekué expressed gratitude to the partners, Johannesburg team, and consulting practice for their contributions over the years. Lawyers affected by the cuts will receive severance, benefits, and outplacement services.

Impact Beyond the Partnership

Although A&O Shearman plans to restructure its partnership, the firm confirmed there are no broader redundancy plans affecting non-partner employees. The changes will focus primarily on the partnership and the specified closures of the Johannesburg office and consulting practice.

To continue serving its African clients, A&O Shearman will rely on its offices in Casablanca, London, Paris, and the Middle East. The firm also plans to explore new collaborations with South African lawyers.

Post-Merger Challenges and Departures

Since the merger was finalized in May, A&O Shearman has seen several high-profile partner departures, particularly in the U.S. These include Philip Bowden, who joined Proskauer Rose LLP, and Daniel Shurman, a 25-year veteran partner with expertise in derivatives and structured finance, who moved to Clifford Chance LLP. Another long-time Allen & Overy professional, Sanjeev Dhuna, also left the firm after more than 26 years to join Shearman in 2021.

The Johannesburg office has also seen departures, adding to the challenges faced by the newly merged entity.

A&O Shearman to Cut 10% of Partners : Looking Ahead

Despite these hurdles, A&O Shearman remains optimistic about the future. Ekué expressed confidence in the firm’s ability to achieve “exceptional outcomes for clients” and to solidify its position as an industry leader. The firm is actively navigating the complexities of post-merger integration while focusing on maintaining strong client relationships across its global offices.