Earlier this year, when UK firm Lovells and US firm Hogan & Hartson implemented the first major trans-Atlantic law firm merger, Australian firms were not particularly surprised. This was the paradigm shift they had been expecting for some time - and they were not anticipating a corresponding groundswell of interest in the Australian market.

"My sense is that only after [international firms]  have organised themselves in trans-Atlantic mergers and made them work will they look further afield," Minter Ellison CEP John Weber told ALB in January. "As important as the [Australian] market is to us, at the end of the day it's only [a small part] of the world's economy.

David Fagan of Clayton Utz  was another who thought  that the Hogan Lovells merger sent a message about the priorities of international firms: "There's no doubt that over a period of time, there's likely to be more linkages into the Australian market from international firms, but I think what this merger's showing is that for the  big US and UK firms, the trans-Atlantic merger is the key merger they want," he observed.

Those comments from Fagan and Weber were made in January for an article on trans-Atlantic mergers which never made it into print. The shock arrival of Allen & Overy in Australia in February drew the focus away from the trans-Atlantic and back onto the local market. Who would A&O raid next? Who would be the next magic circle firm to move down under? And did we really believe that the Mallesons-Clifford Chance merger was dead? Magic circle paranoia took hold and the trans-Atlantic disappeared from the news agenda.

Six months later, it is noteworthy that all the merger action has been across the Atlantic and not into Australia. Hogan & Hartson and Lovells have implemented their 2500 lawyer, 40 office merger.  The partnerships of London-based Denton Wilde Sapte and Chicago-based Sonnenschein Nath & Rosenthal have recently voted in favour of their own merger. The new firm, to be known as SNR Denton, will officially launch on 30 September and will have over 1400 lawyers across 18 countries. And in June UK firm Simmons & Simmons and US counterpart Mayer Brown (known as Mayer Brown JSM in Asia) confirmed that they were also investigating a possible tie-up. The combined firm would have had over 2400 lawyers and achieve a similar scale to the mammoth Hogan Lovells operation. However, the firms subsequently released a statement indicating that they would discontinue the talks. Notably, the statement highlighted compatibility issues rather than any aversion to a merger per se.

 In short, while merger talks down under seem to be permanently stuck at the "speculative" stage, very real steps are being taken in the northern hemisphere towards a global paradigm shift in the legal services market. Once these new paradigms have settled into place, Australasian firms may well be next on the "hit list".  If the old adage of "no smoke without fire" is true, perhaps some negotiations with Australian firms have already begun -  although certain prospective mergers, such as Mallesons and Clifford Chance, appear to be all smoke and no fire. The next major merger may well involve an Australian party - but one suspects that this is simply an adjunct to broader Trans-Atlantic manoeuvres.