HSF and Kramer Levin Merge to Create $2bn Global Powerhouse

WHAT’S HAPPENING?

Herbert Smith Freehills (HSF) and US law firm Kramer Levin have officially completed their transatlantic merger, forming a new global firm: Herbert Smith Freehills Kramer (HSF Kramer). The merged entity launched on 1 June 2025, with a combined revenue exceeding $2 billion and over 2,700 lawyers across 26 offices worldwide.

WHY IT MATTERS?

This is one of the most significant law firm mergers since Allen & Overy's tie-up with Shearman & Sterling last year. For aspiring solicitors, it highlights the growing importance of global reach, particularly US market access, in the legal profession.

London-based HSF has long sought a strong US footprint, a gap this merger finally fills. Kramer Levin brings over 120 partners across New York, Washington DC, and Silicon Valley—the beating heart of finance, regulation, and tech in the US.

KEY DRIVERS BEHIND THE MERGER

• US Expansion: Kramer Levin gives HSF the domestic reach it lacked in America, one of the most lucrative legal markets globally.

• Strategic Practice Growth: The new firm will focus on private equity, bankruptcy and restructuring, real estate, disputes, and securitisation.

• Market Positioning: With its new scale, HSF Kramer now ranks among the top 20 global law firms by revenue.

• Unified Profit Pool: Both legacy firms will now share profits, though they'll have to manage differences in profit per equity partner (PEP)—Kramer Levin had a much higher PEP ($2.4m vs HSF’s $1.6m), reflecting the profitability of the US market.

Leadership and Integration

• Global CEO: Justin D’Agostino continues in this role, reinforcing legacy HSF’s influence.

• US Executive Partner: Paul Schoeman (ex-Kramer Levin co-managing partner).

• Strategic Integration: Alison Brown, previously UK executive partner, now leads US growth.

• The firm is also centralising leadership across regions and practice areas to ensure smooth integration and strategic alignment.

WHY THIS MEANS FOR ASPIRING SOLICITORS

• US Market Knowledge Is a Plus: Firms are aggressively seeking US exposure, so understanding US legal structures and regulatory systems can make you stand out.

• Cross-Border Expertise Is Crucial: Expect more deals and client matters that span multiple jurisdictions. Knowing how to navigate cross-border issues is increasingly important

• Cultural and Operational Integration: Mergers like this involve major change management. Watch how firms integrate values, workflows, client relationships, and pay structures—this teaches you how legal businesses operate at a strategic level.

• Global Mindset Is a Must: Firms want lawyers who can think beyond borders and support international clients with complex, multi-jurisdictional needs.

Practice Areas to Watch:

• Private Equity – Fast-growing and revenue-rich.

• Bankruptcy & Restructuring – Booming in today’s uncertain economy.

• Disputes & Regulatory – Especially relevant in the US, where litigation risk is high.

• Technology & Data – Silicon Valley presence will bolster HSF Kramer’s work in this area.

BOTTOM LINE

This merger is more than a headline—it's a strategic leap that reshapes Herbert Smith Freehills' position in the global legal market. Aspiring solicitors should pay close attention to these developments to understand how firms are transforming and where new opportunities will arise.

WHAT ELSE IS RELEVANT?

Challenges and Potential Cons

1. Profit Integration Challenges

Disparity in Profit Per Equity Partner (PEP):
Kramer Levin’s PEP was $2.4m, significantly higher than HSF’s $1.6m.
Risk: Friction may arise if former Kramer partners feel diluted or if compensation restructuring causes dissatisfaction.
Why it matters: Compensation is a huge driver of retention, and discontent could trigger lateral partner moves or internal politics.

2. Cultural Integration

HSF is traditionally Anglo-Australian, whereas Kramer Levin is American, with differing firm cultures, management styles, and billing approaches.
Risk: Clashes in values or communication styles can disrupt client service or internal morale.
Aspiring solicitor takeaway: You’ll need to be adaptable and culturally aware when working in such a merged environment.

3. Geographical Gaps Still Remain

Despite gaining a strong US presence, HSF Kramer still lacks significant coverage in continental Europe (especially after Kramer Levin’s Paris office spin-out).
Implication: They might need further mergers or alliances to compete with firms like A&O Shearman, which have a broader EU presence.

4. Client Conflicts of Interest

Mergers often create client conflict issues, particularly in high-stakes areas like disputes, restructuring, or private equity.
Risk: Some clients may walk away if the merged firm is now acting for a competitor.
Legal insight: Managing and mitigating conflicts will be key—an area where compliance teams and trainee lawyers often get involved.

5. Operational Complexity

Integrating technology systems, HR, branding, and compliance frameworks across jurisdictions is a massive undertaking.

• Trainee relevance: Trainees may get involved in assisting knowledge teams, rebranding exercises, or client communications during integration.

LEGAL LINGO

Single Profit Pool

A key metric in law firm finances, measuring the average profit allocated to equity (ownership) partners.

Example: Kramer Levin has a higher PEP ($2.4m) than HSF (£1.6m), creating challenges in aligning partner compensation structure post-merger.

AND MORE…

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Thank you for reading 😄