Law Firm Merger Mania: Q1 Marks Period of Supercharged Growth
U.S. law firm merger activity occurred at a torrid pace in the first quarter, as both the number of tie-ups, and the size of the newly combined firms, soared to unprecedented levels, according to a report released on Monday.
There were 29 law firm mergers announced in the United States in Q1, according to the report, compiled by Altman Weil, a legal consulting firm. That’s more deals than in any first quarter since Altman Weil started tracking this data in 2007.
Ward Bower, an Altman Weil consultant, said the wave of consolidation among U.S. firms over the past decade has created ideal opportunities for tie ups with foreign firms that have a distinctly different set of clients. “I think we are going to see a resurgence of cross-border mergers,” said Bower.
This quarter, of course, saw the largest-ever law combination, as Dentons, a global law firm with 2,600 lawyers announced in January that it tied up with the 4,000-lawyer Dacheng Law Offices of China, in a deal structured as a Swiss verein.
There were two other hefty combinations announced in early March: First, DLA Piper combined with Davis of Canada. Two weeks later, Morgan Lewis & Bockius announced a tie-up with Singapore’s Stamford Law Corporation — the first and only U.S. tie-up with a local firm in that country.
All told, the combinations affected nearly 21,000 lawyers worldwide, or about 16,000 lawyers at acquirer firms and roughly 4,700 attorneys at acquiree firms, according to a Big Law Business analysis.
Bower predicted that as more consolidation in the legal market occurs, it will become ever more difficult for law firms to find merger partners. “Conflicts of interest are probably going to prevent some mergers from happening,” he said.
Still, no one is expecting the wave of consolidation to crash anytime in the near future. Brad Hildebrandt, a law firm consultant, said that many firms feel compelled to expand via merger because they are losing clients to larger firms and need a broader platform to maintain their own share of the market for legal services.
“The profession is going through a consolidation stage, and that is not finished yet,” said Hildebrandt.
Source: Bloomberg BNA – Law Firm Merger Mania: Q1 Marks Period of Supercharged Growth
