Long gone are the days of law firms with histories that date back a century or more and plans for staying intact for years to come.
The reason is clear – large firm mergers and acquisitions – and it’s a trend that is continuing in full force.
In the second quarter of 2018 alone, there were 21 major US law firm mergers and acquisitions, reports Altman Weil. That boosts the mid-year total to 51, which puts 2018 on track to be another record-setting year for BigLaw consolidation.
What’s striking about the recent activity is the size of the firms involved. Already this year, mergers have produced three new US law firms with more than 1,000 attorneys.
“We’ve gotten used to the constant drumbeat of law firm combinations, but what’s new is the size of some firms being acquired,” says Altman Weil principal Eric Seeger in this press release. “Already this year, four US law firms, each with over a hundred lawyers, have traded their independence for the security and heft of a larger platform. That says a lot about the intensity of market competition in 2018.”
Among the major deals in the second quarter was the merger of Nelson Mullins (600 lawyers) with the 160-lawyer Florida firm Broad and Cassel. The largest deal was the merger of Clark Hill (a 450-lawyer regional law firm based in Detroit) with Strasburger & Price (a 195-lawyer firm based in Dallas).
Don’t Mess With Texas
The epicenter of merger-mania is Texas. A trio of the biggest 2018 mergers involved Lone Star firms.
In addition to the above-mentioned Clark Hill-Strasburger union, Hunton & Williams (700 lawyers, Richmond-based) joined up with Andrews Kurth (300 lawyers, Houston-based) and Foley & Lardner (850 lawyers, Milwaukee-based) merged with Gardere Wynne Sewell (230 lawyers, Dallas-based).
“Texas has been one of the most desirable in-bound destinations for law firm mergers, acquisitions and lateral hires over the last few years, but big deals like this are rare even in a prime market,” says Altman Weil principal Tom Clay. “Intensifying market competition is making sizeable law firms with hundreds of lawyers receptive to merger offers that they would never have considered a few years ago.”
Is Bigger Better?
Acquisitions of law firms with more than 20 lawyers accounted for 19 percent all mergers in April, May and June 2018, according to Altman Weil. Eighty-one percent were acquisitions of smaller firms. The top geographic regions for acquisitions were the Mid-Atlantic states of New York and Pennsylvania and the western US, including California, Colorado, Washington, Oregon and Hawaii.
In addition, firms are increasingly looking globally in search of new opportunities. Already this year, the international firm Dentons has gobbled up eight firms. Its most recent addition was Alston Hunt Floyd & Ing (44 lawyers, Hawaii). And the AmLaw 100 firm Littler Mendelson (1,500 lawyers) added a new European office by acquiring the eight-lawyer Dutch labor and employment boutique CLINT in Amsterdam.
- Altman Weil Inc. (2Q 2018 Report) http://www.altmanweil.com/index.cfm/fa/r.resource_detail/oid/33FDCCBB-7DA0-4A75-AEAE-E33CDED792AA/resource/US_Law_Firm_Mergers_and_Acquisitions_Roll_On.cfm
- Altman Weil Inc. (1Q 2018 Report) http://www.altmanweil.com/index.cfm/fa/r.resource_detail/oid/92E37960-BBC7-49A0-9E69-1064678F32BB/resource/Thirty_Law_Firm_Combinations_Three_New_1000Lawyer_Law_Firms.cfm