HSF and Kramer Levin sign off on $2bn tie-up

Partners at Herbert Smith Freehills and US firm Kramer Levin have voted in favour of their big-ticket transatlantic merger, forming HSF Kramer.

The combination will create a global player with more than $2 billion in annual revenue, 2,700 lawyers (including around 630 partners) and 26 offices worldwide.

The merged firm will operate under a single profit pool from day one - signalling a deeper integration than several past transatlantic tie-ups.

While Kramer Levin is much smaller than HSF, both firms share a similar practice profile, combining strong finance and corporate capabilities with heavyweight litigation practices.

The merger will take HSF’s US partner count to around 120 across New York, Washington DC and Silicon Valley. It only has a single US office in New York currently.

HSF expects the merger to complete on 1 June 2025.

Bigger picture

The move is a bold and strategic one for HSF, aimed at finally cracking the lucrative US legal market - long seen as a gap in its international offering since its high-profile combination with Australian firm Freehills back in 2012.

The deal follows a similar playbook to the A&O Shearman merger last year: a large UK-headquartered firm joining forces with a smaller but high-PEP US outfit to gain transatlantic scale and credibility.

It’s also being billed as the first truly transatlantic and transpacific law firm, combining HSF’s deep roots in the UK, Australia, Europe and Asia with Kramer Levin’s foothold in the US.

The financials

HSF posted revenue of £1.3 billion in the 2023/24 financial year, with PEP standing at £1.3 million.

Kramer Levin, by comparison, reported revenue of $435 million in 2023, but with a healthier PEP of about $2.4 million (£1.8 million), according to ALM / Law.com.

Navigating the profit gap will likely be a challenge. Look out for shifts in HSF’s partnership model, in line with recent moves by Magic Circle firms to compete with US-style compensation structures.

What they said

HSF chair Rebecca Maslen-Stannage said: "This is a historic and long-term commitment", adding "We are excited about our shared vision and will build on our strong foundations."

HSF global CEO Justin D’Agostino called the tie-up "a major milestone", saying the "global reach and scale means we will be able to deliver more effectively for our clients, whose needs are evolving rapidly in a complex environment."

Kramer Levin co-managing partners Paul H. Schoeman and Howard T. Spilko described the deal as "a unique opportunity" to grow strategically in the US.