McDermott, Schulte Talk Merger to Create $2.8 Billion Law Firm

Chicago-founded McDermott Will & Emery is in talks with Manhattan’s Schulte Roth & Zabel to combine, the law firms confirmed on Thursday.

The firms “are actively finalizing a transformative combination,” they said in a joint statement. “We are operating from a position of shared strength, and our vision is to deepen our ability to serve our clients at the highest levels. We anticipate an official combination in the coming months.”

The deal would create a combined law firm with more than $2.8 billion in gross revenue last year, likely placing it among the country’s 20 largest by that metric. The talks follow a string of mergers involving large law firms in an ongoing quest for scale.

McDermott brought in more than $2.2 billion in gross revenue, while its partner profits reached an all-time high of $4.6 million. The firm, which has roughly 1,300-lawyers globally, is known for its deep bench in healthcare, private equity, and tax.

The 360-lawyer Schulte has long had top-tier investment management, private capital, and fund formation practices. It brought in $619 million in gross revenue last year, while its partner profits exceeded $4 million apiece, according to figures reported by the American Lawyer.

Schulte has seen a steady drip of partner departures, including practice leaders in recent weeks. Restructuring leader Douglas Mintz jumped to Cadwalader Wickersham & Taft, while Michael Swartz, co-chair of Schulte’s litigation group and an executive committee member, joined Quinn Emanuel. A pair of partners left for last year Alston & Bird with three more departing for McDermott, including Allison Scher Bernbach who joined as leader of its US private equity fund regulatory practice in New York.

Schulte in January joined the slew of major law firms who have moved away from single equity partnerships, adding a non-equity partner tier, a strategy used to retain talent and free up profits for rainmakers. The firm promoted 12 lawyers to partner, the largest class in its nearly 60-year history.

Firms “don’t want to get to a point where they have departures that shake the confidence of other partners and clients,” said Kent Zimmermann, a principal at law firm consultancy Zeughauser Group. “Higher performing firms are increasingly putting [mergers] on the table even before they need to because they realize the advantages,” he said.

Schulte is the latest New York-founded firm to pursue the merger route. Kramer Levin Naftalis & Frankel is set to combine with the UK’s Herbert Smith Freehills on June 1. Shearman & Sterling combined with the UK’s Allen & Overy last year to create A&O Shearman. Stroock Stroock & Lavan feverishly sought a merger partner before it ultimately dissolved in 2023.