Law Firm Mergers Continuing Upward Trend
WASHINGTON, D.C., September 27, 2017 – Law firm mergers through the third quarter (as of September 25, 2017) were up, according to the merger research team at Fairfax Associates.
We tracked 14 completed mergers for a total of 49 completed mergers as of September 25. This is higher than the 44 mergers through the third quarter of 2016, and also higher than the historical average of 41 mergers through the third quarter, when compared to our data over the last 10 years (from 2007 to 2016).
The two largest mergers of the quarter were Philadelphia-based Saul Ewing’s combination with Chicago’s Arnstein & Lehr (140) lawyers) and Detroit-based Clark Hill’s combination with Los Angeles-based Morris Polich & Purdy (90 lawyers). Half of the mergers were very small combinations. In seven of the 14 mergers, the smaller firm had between five and 10 lawyers (we don’t include mergers of firms under five lawyers in our statistics).
There were two mergers each in Illinois and Texas, followed by one apiece in California, Florida, Idaho, Indiana, Massachusetts, New York and Rhode Island.
Two of the mergers were cross-border mergers. Eversheds Sutherland combined with Grooterhorst & Partners in Düsseldorf, Germany and Dentons with Tashkent, Uzbekistan firm Avent Advokat.
Six mergers are set to be completed later this year, four of which are cross-border. They include: Womble Carlyle with UK-based Bond Dickinson (580 lawyers); Dentons with Scottish firm Maclay Murray & Spens (200 lawyers) and also with 20-lawyer Gallo Barrios Pickmann in Peru; Norton Rose Fulbright with Henry Davis York in Australia (179 lawyers); DLA Piper with Los Angeles-based Liner (60 lawyers); and Ballard Spahr with Washington, DC-based First Amendment and media law boutique Levine Sullivan Koch & Schulz (25 lawyers). In addition, Ballard Spahr’s combination with Minneapolis-based Lindquist & Vennum (136 lawyers) is set to become effective on January 1, 2018.
Overall, merger trends in the third quarter confirm our ongoing observations relating to the competitive and economic pressures being placed upon firms under 150 lawyers, and their increased openness to merger approaches. With the rising complexity of managing a successful, growing and sustainable law firm, we see more firms struggling with administrative and resource burdens, as well as talent pressures due to senior partner demographics and competition for senior associate and partner level laterals. We anticipate that mergers in the next twelve months will continue to be driven by market pressures and a shifting merger sentiment among smaller to mid-size firms.