July's headline was Hogan Lovells Cadwalader going live. Reports describe a combined firm of around 3,200 lawyers across 38 offices in more than 18 countries, with revenue of about $3.6 billion, billed as the largest law firm merger in history. Miguel Zaldivar is to oversee the combined firm as chief executive.

Then, on 13 July, Semafor reported that Linklaters had approached Cleary Gottlieb about a merger earlier in the year and been turned down. Both firms strongly denied it. Cleary's managing partner told The Lawyer the firm was "absolutely not" in talks, and Linklaters' US leadership said the firm was not pursuing any mergers. The rumour is worth noting because it shows how the market is thinking, even if the specific story was denied.

Why would a firm even be rumoured to want a deal? Reporting on the story points to a drive for international reach, rising lawyer pay and the need to invest in AI systems, all of which push firms to chase scale and cut costs. Linklaters is much larger than Cleary, but Cleary is far more profitable per equity partner, which shows how differently firms define "success" when they weigh up combinations.

Buyers. The prize is US market share, where the highest fees are, and the ability to offer clients one firm across jurisdictions. The risk is a culture clash and partner departures, which can drain value after a merger is announced.

Sellers. A smaller firm joining a giant should ask hard questions about the profit pool. Lockstep and non-lockstep pay systems, equity entry costs and the treatment of legacy partners can leave some partners better off and others worse off.

Europe. Large combinations also reshuffle the European map. Offices overlap, conflicts arise, and firms often prune practices or merge teams within a year or two.

AI. In July, the question on many managing partners' minds was how much of the technology budget they could afford to share. Bigger firms can negotiate better enterprise terms with platforms, which strengthens the case for scale.