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New York firm Donovan, Leisure has been crippled by the loss of two-thirds of its lawyers to Orrick, Herrington & Sutcliffe, the California-based firm which has been expanding aggressively in New York. The two firms had been discussing a merger, but when the talks failed Orrick hand-picked the lawyers it wanted, including 14 partners and chairman Peter Coll. "Our primary interest was the litgation department," says New York managing partner Michael Voldstadt, soon to transfer to the new London office. "But there were other parts of the firm that interested us. The fact is that law firm mergers rarely happen. There was also a conflict issue that took a long time to resolve — eventually we just drifted apart."

Daimler-Benz and Chrysler have announced on May 7 the largest industrial merger ever. The deal values Chrysler at US$39 billion. The new group, known as Daimler-Chrysler, is estimated to be worth US$92 billion and will be the world's fifth-largest vehicle maker.

UK city firm Frere Cholmeley Bischoff agreed to merge with national firm Eversheds' London office on April 30. The new office will have 70 partners and 200 other fee earners. The merger, effectively a takeover, will take effect from August 1 when the firms completely integrate in London operations. However 11 Frere Cholmeley partners, including the firm's entire property and private client practices, are unhappy with the arrangement. They are leaving, with their associates, to form Forsters, a new law firm with a total of 55 lawyers. David Willis will become the senior partner.

The partial privatization of Airports Company South Africa (ACSA), a company operating nine airports, is completed. The Government of South Africa sold 20% of the issued share capital of ACSA to a consortium led by the Italian Aeroporti di Roma. The consortium also received an option to buy an additional 10%of the issued share capital. The Government intends to sell 10% of the capital to disadvantaged South Africans and 9% to ACSA employees and management. US firm White & Case advised the South African Ministry of Transport. Johannesburg-based partner Darryl Deaktor led the team. Also involved were partners Ron Goodman and John Janks, in Johannesburg, and David Eisenberg in London.

Citigroup, the new company formed by the Travelers/Citicorp merger, appears to breach the US’s regulatory barriers between financial services. But lawyers suggest there are possible structures for the company to offer the full range of services. Paul Lee reports

Privatization and deregulation are creating a more modern business environment in Austria and law firms are under increasing pressure to provide a similarly modern service. Nick Ferguson writes

On October 3 1997 a new Public Trading in Securities Act was published, which took effect on January 4 1998. The Act replaces the Securities Trading Act of 1991. The new Act provides, among other things, for a more detailed regulation of the field of derivatives transactions.

Foreign investment enterprises in the project finance field must now seek the same foreign exchange authorizations as domestic entities. By Edward Turner and Edward Lam of Shearman & Sterling, Hong Kong and London

The Law Society of Singapore is lobbying the government to allow law firms to change their partnerships into private companies. Creating private companies would give partners limited liability and the society believes it would encourage more aggressive marketing strategies. The move is also being seen as a step to make domestic law firms compete more effectively with foreign law firms. The Law Society believes foreign firms in Singapore have greater resources and pools of talent than local firms. Limited liability for partners of firms would make mergers of law firms less risky for those involved.

US firms Skadden, Arps, Slate, Meagher and Flom, and Shearman & Sterling have scooped the worlds's largest deal: the merger between Travelers Group and Citicorp, estimated at $166 billion. The merger announcement was expected to speed up plans for reform of US banking law, which prohibits bank holding companies from involvement in insurance business. Shearman & Sterling is representing Citicorp. Senior partner Stephen Volk and corporate specialist David Heleniak are leading the team.