First steps in building a U.S. legal powerhouse
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Building a substantial foothold in the U.S. has long been an objective for A&O, given the size of the U.S. economy, the importance of U.S. law globally, the scale and depth of the legal market, the dominance of U.S. financial institutions – and now the global reach of U.S. enforcement agencies, the extent of litigation risk for businesses, and the U.S.’s place at the heart of the tech revolution.
Back in 2019, when merger talks with U.S. firm O’Melveny & Myers ended, it became clear to A&O’s leadership that a change of direction was needed if its U.S. ambitions were to be realised.
“Establishing a stronger presence in the U.S. is not a new objective for us,” says Tim House, A&O’s U.S. Senior Partner. “We’ve known for a long time that we needed to offer clients an even balance between the two dominant global legal systems – U.S. and English law – alongside our local law capabilities. So even as the merger discussions were taking place, we were still planning where more investment and organic growth was needed in the U.S. That then quickly went from being Plan B to Plan A.”
A&O’s U.S. strategy required a fundamental mind shift, Tim says, from being a firm that could execute deals sourced outside the U.S., with a U.S. element, to being a firm with a strong presence on the ground that could attract U.S.-based global clients.
“We knew our strategy had to be driven by what our partners were hearing from U.S. clients about where the opportunities were. Northern California, for example, hadn’t been a top priority initially, but quickly became one.
“We discussed at length with each practice group what was needed to go after these opportunities, and then pieced all that together into a strategy with investment priorities for the next three years.
“We built the plan from the ground up in the U.S. first, and then developed it with global practice groups and sector leads to make sure it fulfilled what international clients needed globally from our U.S. capabilities too.”
A clear message from global clients
Discussions with clients brought into focus the investments A&O needed to make to become more competitive in important areas.
Partner Dave Lewis, who has been closely involved with the U.S. growth strategy, says: “We knew what had worked for us previously in the U.S., so we prioritised investment in the areas where A&O already had a market-leading global brand but was missing a piece of the jigsaw in the U.S.
“Consistently, U.S.-based global corporates and banks were telling us they wanted a single firm to be able to manage large cross-border transactions, litigation and regulatory investigations. Equally, we had many international clients using us everywhere except the U.S. and giving us the same message.”
Take the example of a big pharma company with a major product about to come off patent, Dave says. There are multiple risks to consider, from litigation to protecting IP across Asia, the UK and Europe, as well as the U.S.
“In reality, very few firms can coordinate all that with equal strength in each region,” he says. “The same is true for tech companies or financial services: think about coordinating all investigations into price fixing globally, for example. What clients were telling us they wanted was a business partner at the table, not multiple law firms to manage.”
Integration the key to success
With A&O’s partner numbers in the U.S. nearly doubling in less than three years from 47 to 91 – numbers that include eight internal promotions – clearly the firm is attracting the quality on which its strategy relies. But with rapid growth comes the need for quick integration.
Says Tim: “For clients to get the most out of us, they need to know their A&O partners are fully integrated into the firm and can bring together everything we have to offer.” That includes parts of the business such as Advanced Delivery & Solutions, Peerpoint, our flexible legal resourcing service (which opened in the U.S. in 2021) and A&O Consulting, which is now active in the U.S. advising in-house legal departments on innovation.
Fundamentally, A&O will not achieve its investment objectives or make good on its promises to incoming partners if they sit in siloes, says Tim. “Clients aren’t buying individuals, they’re buying the collective efforts of well-integrated teams. And good integration starts at the point of recruitment.”
It’s a view shared by IP partner and patent litigation expert Sapna Palla, who joined A&O’s New York office in 2021. “What drew me to A&O was the opportunity to join an ambitious team that had a very entrepreneurial feel to it, but also to be part of a genuinely collaborative culture,” she says.
“I met dozens of A&O partners across the international network before I made the decision to join, so when I started I already felt part of the firm. On day one, I got a 24-page integration plan telling me who I should connect with, which networks I could join, where the client synergies were likely to be – I’ve never seen so much thought put into it before!”
That sense of shared success and collaboration was a real attraction, she says. “I could see how much it would benefit my clients to have quick access to the scale of A&O’s global platform, plus its investment in new technologies and innovations.”
Bringing diverse perspectives to the table
For Sapna, an immediate past-president of the Asian American Bar Association of New York – and winner of the New York City Bar Association’s Diversity and Inclusion Champion Award in 2021 – A&O’s commitment to diversity, equity and inclusion was also a key consideration.
“It’s incredibly important for our clients that we can bring diverse teams and perspectives to the table,” she says. “That’s the whole point of diversity – if we can think differently, we’re far more likely to be able to come up with solutions to help clients.
“It’s something that has always been important to me personally, too. I like the balance at A&O of having targets in certain areas – for example at least 40% of our partnership candidates each year should be women – and a clear plan of how to achieve that, alongside a strong emphasis on a culture of inclusion.”
Dave says that after achieving Mansfield Rule Certification Plus in 2021, sustaining progress with diversity has been an important factor in A&O’s recruitment broadly.
“It was something we stressed in our searches for lateral hires, as well as focusing on our own pipeline for partnership. We now have 44% diversity in the partnership in the U.S. – up from 29% eight years ago – but there is always more work to do.”
It has always been about finding good people at the top of their field, who, equally importantly, fit with our culture.
What’s next in the U.S.?
A&O’s big-name hires and client wins are certainly making the U.S. market sit up and take notice, says Tim, but A&O isn’t slowing down just yet.
“We’ve made huge strides in a short time, as well as steadily growing in other areas – such as our finance practice in New York – so we’re making progress towards our ultimate aim of being evenly balanced across English law, local law and U.S. law.
“As well as our investments in tech, life sciences, renewables and leveraged finance, we’ve also made significant additions in private equity, restructuring, M&A, capital markets, real estate, litigation, investigations and arbitration – in fact our U.S. litigation team is now the largest in A&O’s global network. But we’re still building the scale we need to be competitive in every area we want.”
While other locations in the U.S. are of interest – Texas being one, given its energy transition plans – for now, the focus is on ensuring the firm has the right balance of services across its existing offices.
Of course, there are challenges with the sort of rapid growth A&O has seen, not least integrating so many new people into the firm and ensuring everyone can make a positive impact quickly. “We added 27 new partners in the 2021-2022 financial year alone,” says Tim. “Three of these were internal promotions – a proportion we want to see increasing.”
So far, the impact of A&O’s investment is exceeding even its own expectations, with growth from the U.S. contributing more than 50% of A&O’s overall revenue growth in the last financial year.
The investment costs are heavy, and standalone profitability after exceptional costs is still to be achieved across the whole U.S. practice. But, Tim says, core practices in which the firm has invested heavily are profitable of their own accord now. Equally, revenue per lawyer, as well as contribution margin, are matching both firm and U.S. standards.
“This success is down to the groundwork our U.S. team has put in for more than a decade, alongside the people we’ve invested in recently, both internally and externally,” Tim says. “It has never just been about attracting big names for us; it has always been about finding good people at the top of their field, who, equally importantly, fit with our culture.
“The people who have joined us – not only the partners, but the associates and business teams – all want to build something together and share success. That is what we’re proud of here and what, I believe, gives us a strong platform to continue our growth into the future.”
The sectors driving A&O's U.S. growth
Elizabeth Holland is head of our U.S. Life Sciences practice. She leads the team across New York, Washington, D.C., Silicon Valley and our newest office in Boston.
“Across the life sciences sector, we provide the full spectrum of legal support, including M&A, commercial transactions, IP, capital markets and finance, regulatory and litigation.
Opening our Boston office in 2022 added an important dimension to this by giving us a presence in the ‘Life Sciences Corridor’ – a hub for more than 450 emerging pharma, biotech and medtech companies, along with nine of the 10 biggest global pharma companies. It’s an important community that attracts significant investment and some of the largest IPOs the sector has seen recently.
The expansion of our life sciences IP team brings us closer to our aim of being the only elite global firm to offer top-tier, scaled and coordinated IP capabilities to life sciences businesses worldwide.
Combining that with our other lateral hires in tech litigation and transactions and antitrust on the East and West Coasts means we now offer the full spectrum of IP protection to clients worldwide, and are coordinating expertise across the rapidly converging sectors of life sciences and technology litigation in all key jurisdictions.
The ability to develop coordinated, cross-border IP protection strategies within one firm is something that more and more of our global clients are asking for. Novartis is a prime example of how adding to our capabilities in the U.S. has added to the global picture for A&O. In addition to our long-standing relationship internationally, our expanded team in the U.S. is now leading on major patent litigations and advising on other IP issues.”
Dan Sinaiko, alongside John Marciano, leads the Renewables team in A&O’s U.S. Projects, Energy, Natural Resources and Infrastructure (PENRI) practice, and is a founding partner of our Los Angeles office.
“California is leading the way in the world’s transition to more sustainable forms of energy, along with the tech developments needed to support that. Strengthening our Renewables team in the U.S. consolidates A&O’s place as one of the dominant firms working towards this energy transition across the U.S. As the transition to a low-carbon future accelerates worldwide, it creates opportunities for many of our developer and capital provider clients.
Our Renewables team is now spread across the U.S. and is actively involved in the entire renewable and ESG market, with significant expertise in traditional project finance, project and corporate M&A, tax equity, joint ventures and private equity investments – complementing A&O’s wider global practice.
Since 2021, the PENRI team has opened nearly 700 new matters for a variety of sponsors, developers, project companies and financiers. The team has worked on some of the largest and first-of-their-kind transactions through our representation of clients such as Summit Carbon Solutions on the largest global integrated carbon capture project, and Voya Investment Management on its investment in the USD1.9bn financing for the largest solar plus energy storage project in the U.S.
We have also advised CIM Group on a 250 MW solar PV project that will be one of the largest permitted solar parks in the world and one of the largest inverted lease transactions completed to date, as well as one of the first renewable energy projects fully developed by Tokyo Gas in the United States. The firm would not have been a part of these ground-breaking transactions without the expansion of the practice in the U.S.”
Bijal Vakil is global co-head of A&O’s Technology practice, along with Daren Orzechowski and Filip Van Elsen, and a founding partner of A&O’s Silicon Valley and San Francisco offices.
“Opening our offices in Northern California provided an ideal platform to bring A&O’s top-tier global tech practice into the heart of the world’s largest technology economy and the centre of trans-Pacific business.
Combined with our colleagues joining on the East Coast, A&O’s U.S. tech practice now has considerable expertise in patent litigation, IP strategy, antitrust and tech-focused transactions, including fintech deals.
This gives us one of the most sophisticated technology practices and strongest global networks to advise early-stage start-ups and innovator companies, through to leading tech businesses and consumers of technology.
We sum up what we do as ‘Create, Navigate and Protect’. ‘Create’ is about advising clients as they bring their ideas to life, whether new technologies, companies or business models. ‘Navigate’ describes using our expertise to help our clients navigate legal and regulatory complexity. And ‘Protect’ is about drawing on our disputes expertise to help clients defend the tech they own.
Our tech practice has advised the market’s largest players such as Meta and Google in litigation and on key strategic projects including Meta’s Novi Financial. We are also advising growth companies in the sector on key developmental milestones, such as advising Checkout.com on raising USD1bn in its Series D funding round at a valuation of USD40bn. We have had several trial wins since expanding our U.S. IP team, including for Google on its Nest Smart Thermostats.
Every business is a tech business now, so having a multi-disciplinary international team of this standard is a game-changer, not only for our clients in the U.S., but in our other key international markets as well.”
Jake Mincemoyer is A&O’s U.S. head of Leveraged Finance and joined our New York office in 2021.
“A&O has one of the most renowned Leveraged Finance practices in the world, consistently ranked as a leading global advisor and known for structuring deals that become the industry standard.
The expansion of our Leveraged Finance team in the U.S. deepens our bench of experienced lawyers that can meet the growing client demand, and gives us a global team of more than 250 lawyers.
Structuring deals in today’s market requires a broad mix of finance capabilities and we are one of the few firms that can cover all aspects of complicated leveraged finance and high-yield transactions, including both broadly syndicated and private market transactions (which have grown exponentially in recent years) – particularly for clients who want one firm with New York, English and local law expertise.
Given the convergence of both deal teams across the U.S. and Europe markets, and among syndicated, private credit and high-yield products, strength across geographies and specialisms in the leveraged finance market is crucial.
Our U.S. growth is winning recognition in the North American Leveraged Loan league tables, ensuring we maintain our No 1 position globally and keep A&O firmly at the forefront of the industry.”