Image: Digital Vision
Law firm mergers may grow in 2009
January 19, 2009
Law firm mergers rose slightly in 2008 over the previous year, and experts are predicting that the trend will pick up speed in 2009 because of the unstable economy.
A survey of U.S. law firm mergers in 2008 by consulting firm Hildebrandt International showed that 55 mergers and acquisitions were completed, up from 54 in 2007. Already this year, 20 mergers have been completed.
"We expect the current economic cycle will accelerate the pace of consolidation in the legal industry," said Lisa Smith, the head of Hildebrandt's law firm strategy and merger practice. "Merger activity has picked up in recent months as firms look to diversify their client base, geography and practice mix."
Law firm mergers have generally been on the rise since 2004, when there were 49. Numbers peaked in 2006, when 59 mergers occurred. In 2008, the first quarter was the most popular time to merge, and 22 such combinations took place. There were 14 mergers in the second quarter, 15 in the third quarter, and four in the fourth quarter, according to the Hildebrandt survey.
The largest merger of the year was in January, and brought together Kansas City, Mo.-based Blackwell Sanders and St. Louis-based Husch & Eppenberger. The resulting firm — Husch Blackwell Sanders — had a headcount of 630 attorneys. The second-largest merge was between Chicago's Mayer Brown and Hong Kong-based firm Johnson Stokes & Master. Other significant mergers were between K&L Gates and Kennedy Covington Lobdell & Hickman as well as Hughes & Luce; McGuireWoods and Helms Mulliss & Wicker; and Reed Smith and Hong Kong-based Richards Butler.
Los Angeles was a popular place for law firms to look for combinations. That city topped the list with five inbound mergers in 2008. Philadelphia also saw much activity, with four inbound mergers last year. Chicago; Washington; Charlotte, N.C.; Mobile, Ala.; and Indianapolis each had two inbound mergers. Texas also saw a significant amount of merger activity, with two combinations in Dallas and one each in Houston and Austin.
The largest of the firm mergers that have already taken place in 2009 were between Bryan Cave and Atlanta-based Powell Goldstein, followed by the combination of Bradley Arant Rose & White and Boult, Cummings, Conners & Berry.
The Hildebrandt survey found that cross-border law firm mergers were also up slightly. Seven such mergers took place in 2008, compared with five in 2007. In addition to the two Hong Kong firms that merged with U.S. firms, two German firms combined with U.S. firms. The United Kingdom, Taiwan and Spain accounted for the three other international mergers.
It wasn't just mergers that were hot in 2008. The Hildebrandt survey found that 244 new law firm branch offices opened last year. Close to half — 120 — were in the United States, while 124 were outside the country. Of foreign destinations, Asia and the Middle East continued to prove popular, with 36 and 30 office openings, respectively. Germany and London each saw seven new offices open, while Brazil and Switzerland each had five openings.
For new domestic offices, California topped the list. Sixteen offices opened in San Francisco and the Silicon Valley, six in Los Angeles, two in San Diego and one in Ventura. New York and Washington both had seven openings, while Chicago had six. Houston had five new offices open, and Seattle, Boston and Law Vegas each saw four, according to the Hildebrandt survey.
Most Popular Headlines
- Top ABA staffers exit amid reorganization
- Daschle departing Alston for DLA Piper
- Unanimous 7th Circuit finds mezuzah removal worth a lawsuit
- Employers unsure about medical marijuana
- Obama shakes up counsel's office
- The 2009 NLJ 250
- New approaches to law firm recruitment
- Hasan case to test military justice system
- 'He had the ability to do anything'
- No quiet time for new justice
