Herbert Smith Freehills
Global BigLaw firm from 2025 HSF-Kramer Levin merger, $2.4bn revenue.
On the record
Checkpoint: HSF Kramer FY27 results, testing if PEP stabilizes or partner exits accelerate
The call
HSF Kramer ranks among the top 20 global law firms, but its first combined year shows profit per partner trailing Kramer Levin's prior standalone number.
Herbert Smith Freehills is a London-based law firm with $2.4 billion in revenue that serves major corporations and governments on complex deals and disputes. It is hard to replace because clients stick with established law firms for decades, and AI tools can only handle routine paperwork, not the high-stakes advice and courtroom work that require a license to practice law. The real risk is not AI or competitor poaching but whether the firm can fix internal problems from its recent merger with Kramer Levin: profits per partner dropped 12.5% in the first year and senior lawyers have started leaving, which could damage its ability to keep up with rival firms like Clifford Chance if the slide continues.
Why
01
AI pressure: Legora and similar GenAI contract-drafting and document review tools. AI now drafts first-pass contracts and reviews documents, cutting the associate hours firms used to bill clients for. Could AI do the core job? Unlikely.
02
Bigger players: Ashurst-Perkins Coie merger. Ashurst's 2026 tie-up with Perkins Coie builds a same-scale rival chasing the same US, UK, and Australia clients. Could a giant copy it? Probably.
03
What protects it. Bar licensure and liability rules keep AI and non-lawyer firms from giving regulated legal advice directly.
What would change this call
FY27 results (July 2027) show PEP stabilizing or closing gap to Linklaters (£2.48m) and Clifford Chance (£2.3m). Would show the merger integration is stabilizing rather than eroding value.
Additional senior partner departures from disputes or US practice groups reported before mid-2027. Would show integration friction and talent flight are accelerating, not settling.
Ashurst-Perkins Coie post-merger performance and US lateral hiring through 2026-27. Would clarify whether HSF Kramer is losing ground to a directly comparable transatlantic rival.
Additional senior partner departures from disputes or US practice groups reported before mid-2027. Would show integration friction and talent flight are accelerating, not settling.
Ashurst-Perkins Coie post-merger performance and US lateral hiring through 2026-27. Would clarify whether HSF Kramer is losing ground to a directly comparable transatlantic rival.
Key numbers
- PEP $2.1m, down 12.5% vs Kramer Levin's 2024 $2.4m
- First post-merger revenue: $2.4bn
- 26 offices, ~2,700 lawyers at merger close
Named risks
- PEP down 12.5% versus Kramer Levin's pre-merger standalone level, signaling unresolved profit-pool harmonization.
- Senior partner attrition in Tokyo and New York during first year of post-merger integration.
- Peer firms (Ashurst-Perkins Coie, A&O Shearman) executing identical transatlantic merger strategy, eroding differentiation.
- GenAI commodifying associate-level document review and due diligence, pressuring associate leverage economics.
- Reputational exposure from 2024 partner conduct controversy, only corroborated by Wikipedia.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| A&O Shearman | losing to | Reported £2.9bn client revenue in first full combined year, ahead of HSF Kramer's $2.4bn (2026-07-23) |
| Ashurst / Perkins Coie | contesting | Approved merger (April 2026) to form $2.7bn Ashurst Perkins Coie, mirroring HSF Kramer's own scale strategy |
| Clifford Chance | losing to | PEP £2.3m vs HSF Kramer's £1.5m as of 2026-07-23 results |
| Linklaters | losing to | PEP £2.48m, up 11.4% YoY, vs HSF Kramer PEP down 12.5% vs Kramer Levin standalone (2026-07-23) |
| Seladore Legal | gaining on | Poached HSF Kramer's Tokyo managing partner David Gilmore in January 2026 |
| Gibson Dunn | gaining on | Hired away an HSF Kramer New York employment litigation partner in April 2026 |
Questions people ask
- Is Herbert Smith Freehills profitable in 2026?
- Yes. HSF Kramer's first full post-merger year (1 May 2025 to 30 April 2026) reported global revenue of $2.4bn and profit of $850.8m, with profit-per-equity-partner at $2.1m (£1.5m), reported 23 July 2026.
- Did Herbert Smith Freehills merge with another firm?
- Yes. Herbert Smith Freehills completed its merger with New York's Kramer Levin Naftalis and Frankel on 1 June 2025, forming Herbert Smith Freehills Kramer, a firm of about 2,700 lawyers and 630 partners across 26 offices.
- Who is Herbert Smith Freehills Kramer's biggest competitor?
- Peer Silver Circle firm Ashurst is executing an identical transatlantic strategy, merging with Perkins Coie (approved April 2026) to form a $2.7bn firm. A&O Shearman also outpaces it, reporting £2.9bn client revenue in its first full combined year.
- Could AI replace lawyers at Herbert Smith Freehills Kramer?
- No. Licensure and liability rules bar AI from practicing law, and the firm's own defended verdict cites this as a durable moat. AI is instead being deployed internally via Legora and a GenAI disputes tool, with a chief AI officer hired in October 2025.
- What is Herbert Smith Freehills Kramer's profit per partner?
- PEP was $2.1m (£1.5m) for the year ending 30 April 2026, up 7% on legacy HSF's pre-merger PEP but down 12.5% on Kramer Levin's standalone 2024 PEP of $2.4m, per results reported 23 July 2026.
- Who owns Herbert Smith Freehills Kramer?
- It is a private LLP partnership owned by its equity partners, not a publicly listed company. The current entity was formed by the 1 June 2025 merger of Herbert Smith Freehills (itself formed 2012) with Kramer Levin Naftalis and Frankel.
Timeline
- 2026-07-23First post-merger full-year results: $2.4bn revenue, $850.8m profit, PEP $2.1m, down 12.5% vs Kramer Levin standalone
- 2026-04-27New York employment litigation partner departs to Gibson Dunn
- 2026-04-2125 new partners promoted globally; 35 lateral partner hires since Nov 2024 disclosed
- 2026-03-11Firmwide adoption of Legora AI platform branded Intelligent Legal Colleague
- 2026-01-07Tokyo managing partner David Gilmore departs for boutique Seladore Legal
- 2025-10-27Ilona Logvinova appointed first global chief AI officer
- 2025-09-25GenAI fact intelligence platform launched for Disputes practice
- 2025-07-24Legacy HSF reports final pre-merger year revenue of £1.36bn, up 4% YoY
- 2025-07-02London newly-qualified lawyer pay raised to £145k
- 2025-06-01Merger with Kramer Levin completes, forming Herbert Smith Freehills Kramer
Revision history
23 July 2026
First assessed. Defensible for now. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Legacy HSF grew revenue by 4% to £1.36bn in final pre-merger year (2025-07-24)
- HSF Kramer revenue reaches $2.4bn in first post-merger results (2026-07-23)
- HSF's merger with Kramer Levin goes live (2026-07-16)
- Herbert Smith Freehills Kramer (2026-05-19)
- Herbert Smith Freehills new tool illuminates global AI laws and policies (2025-05-23)
- Former HSF Kramer Tokyo Head Leaves (2026-01-07)
- HSF Kramer Partner Jumps to Gibson Dunn (2026-04-27)
- Herbert Smith Freehills Kramer promotes 25 to partnership (2026-04-21)
- HSF Kramer boosts NQ pay in London (2026-07-16)
- Herbert Smith Freehills Number of Employees 2026 (2026-06-29)
- Headcount, Funding & Open Jobs (2026-06-22)
- Ilona Logvinova joins HSFK as global chief AI officer (2025-10-27)