WASHINGTON, D.C., January 2, 2018 – Law firm mergers experienced record-breaking growth in 2017 - in numbers not seen since 2001 - according to the merger research team at Fairfax Associates.
In 2017, we tracked 65 completed mergers (meaning the effective date of the merger occurred during 2017). This compares with 58 mergers in 2016, and is higher than the historical average of 50 mergers per year when compared to our data over the last 10 years (from 2007 to 2016). The number of mergers in 2017 is the highest number of combinations since 2001, when there were 86 mergers on record.
In a continuation of a trend we have observed for the past two years, a large part of this growth is being driven by cross-border mergers. In 2017, we recorded 19 cross-border combinations, which is a significant increase over the 13 cross-border mergers in 2016 (which itself, was a big jump up from 2015, when there were only five cross-border combinations). Major cross-border combinations in 2017 included Dentons with Maclay Murray & Spens (Glasgow), Norton Rose Fulbright with Chadbourne & Parke (New York) and also with Henry Davis York (Sydney), Womble Carlyle with Bond Dickinson (London), DLA Piper with LETT (Copenhagen), and Eversheds with Sutherland Asbill & Brennan (Atlanta).
The majority of mergers in 2017 continued to be small combinations, with sixty-eight percent of the mergers involving firms with between five and 20 lawyers. The largest domestic mergers included Saul Ewing with Chicago’s Arnstein & Lehr (140 lawyers), Arnold & Porter with New York’s Kaye Scholer (375 lawyers), and Baker Donelson with Baltimore’s Ober Kaler (110).
New York, California, Texas and Florida led the way in terms of merger activity (based on the location of the smaller firm, including in-state mergers). New York had eight mergers, including four in New York City. There were seven mergers each in California and Texas, and five mergers in Florida. There were also three mergers apiece in Illinois and Ohio, and two mergers each in New Jersey and Wisconsin. The California mergers were all in the Los Angeles area and the two largest were DLA Piper’s combination with Liner (60 lawyers), and Clark Hill with Morris Polich & Purdy (90 lawyers).
Looking forward to 2018, there are already seven mergers that have been announced for completion in the first quarter of the year. These include Ballard Spahr with Minneapolis-based Lindquist & Vennum (136 lawyers); Womble Bond Dickinson in two mergers, with Los Angeles-based IP boutique Blakely Sokoloff Taylor Zafman, and Bennet & Bennet, a communications and technology boutique based in Bethesda, Maryland; and Smith Gambrell & Russell with Rodi Pollock Pettker Christian & Pramov, a business law boutique in Los Angeles. Based on active discussions and continued interest in growth through merger we expect 2018 to bring consolidation in the legal industry consistent with the levels in 2017.
Fairfax Associates collects data from published reports, press releases and direct reports from law firms. Mergers are reported where the acquired firm has five or more lawyers. Upon routine verification of the data, some historical numbers may have been updated since previously issued reports, and the number of mergers contained herein may change as additional mergers are announced.