Our custom after trips of some substance is to report back to readers in the form of a “Letter From ____,” and since I spent all of last week in my Second Favorite City in the World, here you have it.

Logistics and context

I had 21 meetings in four days with a mix of UK- and US-based firms, ranging in size from the Magic Circle and AmLaw 10 to highly capable niche and “category killer” firms—plus appearances on two panels at the Clyde & Co. annual GC risk forum and a meeting at the FT.

Visiting anywhere, but in this case London, every three to six months is a bit like seeing a neighbor’s child over the same lag time; changes are clearly perceptible but not dramatic and most likely difficult to discern for those living through it day to day.  Thus, do not mistake the observations that follow for realizations of seismic or existential magnitude; they are more by way of potentially leading indicators and indicia. (Nor are they listed in an order having anything whatsoever to do with gravity, prevalence, or foreseeable consequences; the sequencing is purely arbitrary and impressionistic.)

The first three are reports of what subjects were top of mind for people; what they brought up unaided or unbidden, if you will, once the “agenda” (if any) had been covered.  The fourth is simply my own reflections.

So, shall we proceed?

Kirkland

Here is not the place to rehearse what Kirkland’s been up to lately in the lateral market, but if six months ago the reaction to K&E’s latest multi-million dollar talent grab was, “There goes Kirkland being Kirkland…,” this week there was palpable disquiet, bordering on anxiety—closer to the queasy feeling prompted by the thought “Do they know something we don’t?”

Now, as someone who assumes that by and large all serious students of an industry over the long run can at least agree on the basic facts and economic realities—if scarcely ever on what they mean or what specific guide to action they indicate, right here, right now—I seriously doubt Kirkland “knows” anything you and I don’t.  But it has become indisputable that they’re making a different bet on that information than most of us.

They seem to be betting (this is all hypothesized based on zero inside information or intelligence) that one can, if not exactly buy market share, certainly buy market recognition, which, over the longer run—this part is their bet—can be built into self-sustaining, economically viable and high-margin practices.  Most of us plod along trying to make prudent and sensible decisions vis-à-vis hiring and recruitment (among many other things) premised on rather unheroic projections for ROI this fiscal year and perhaps the next and in the wildest case the year after that, after which we discount everything to zero, or at least not measurable.

Kirkland seems to be playing a longer game and/or one where they’re willing to face the prospect of real losses in some areas on the bet that their portfolio will pay off over all.   But in reality, neither I nor anyone I’ve ever talked to can state persuasively that they really know what Kirkland’s calculations are.  This is simply yours truly trying to offer up a hypothesis that can slot their actions into that of rational, prudent-people behavior without resort to histrionics like “this upends everything!” or baleful conspiracy theories.

Allen & Overy/O’Melveny

The questions here surrounded, “Will [should] it happen?” and “Does this finally change things?”

On #1, my strong opinion, which I offer prepared to countenance dissent, is that it should go through.  The strategic objective it would serve for A&O is self-evident: While it would not “solve” their exhaustively discussed US market presence challenge, it would be the single largest step in 30 years in that direction.  And likewise for O’Melveny, it would do even more; it would solve, once and for all, the profound challenge of how to deal with the past 30 years of changes for them.  (I won’t go into detail here, but return in your mind to the southern California law firm market ca. 1985 and envision the relative rankings of Gibson Dunn, Latham, and O’Melveny then vs. that of today.)

Whether it will happen?  Painful as it is for me to report, skepticism was widespread.  First and foremost is simply the skittishness of the Law Firm Partner Type.  It doesn’t take much to scare the horses, and what it takes need not even be real—it can be imaginary.  That to me is the most probable road to defeat, if it’s to defeat it’s headed.  Other more hard-boiled reservations were voiced, but to me those are all solvable given a smidgen of creative thinking and a lot of hard work.

As for #2, does it “change things” in an existential way?  Probably not, mostly because the industry, fires fanned by the perennially breathless legal press,  has been awaiting the merger of [pick one] Freshfields/Davis Polk, Cravath/Slaughters, Links/Simpson Thacher, blah blah blah.  If you care for life as you know it, don’t hold your breath—but having been dazzled by the prospect of such far-fetched fantasy, anything less underwhelms.

On the other hand, it would be one more very high-profile milestone following (for example) Eversheds Sutherland, BLP/Bryan Cave, Hunton Andrews Kurth, and more probably in the works as we speak.  The transatlantic axis is dead, long live the transatlantic axis.