The U.S. legal industry is on pace to see more law firm combinations take place in 2013 than in each of the past two years, according to a report released Monday from legal consultancy Altman Weil, with 21 tie-ups announced in the first quarter of the year alone.
The number of acquisitions—mostly coming from midsize firms taking on smaller shops with fewer than 25 attorneys—trumps the 14 combinations that took place in the first quarter of 2012 and the 16 that occurred in the first three months of 2011. Both of those years saw 60 total law firm mergers by year-end.
"Unless something unforeseen happens, we’ll be ahead this year," says Ward Bower, a principal at Altman Weil.
Many of the mergers in this batch, Bower says, stem from firms striving to become truly national: "Generally speaking, these are larger firms looking to fill a practice niche or establish in a new geographic location."
The largest of the first-quarter deals, which Altman Weil records based on when they are announced rather than when they become effective, is the merger of 220-lawyer Detroit firm Clark Hill with 80-lawyer Pittsburg firm Thorp Reed & Armstrong.
Sibling publication The Legal Intelligencer first broke the news in January that the two were in merger talks and had more details on the deal earlier this week. The combined firm will have 12 offices in the United States, primarily in the Midwest and Mid-Atlantic. Thorp Reed managing partner Jeffrey Conn told The Intelligencer that the two firms were in serious discussions for the past four to six months.
Another Detroit-based firm, Dickinson Wright, also joined the merger rush in the first quarter, combining with 60-lawyer Phoenix firm Mariscal, Weeks, McIntyre & Friedlander in mid-January. As The Am Law Daily reported at the time, the tie-up—which was more than a year in the making—gave 290-lawyer Dickinson Wright lawyers specializing in real estate, commercial litigation, family law, and employment law. A less-popular market for Am Law 200 firms, Phoenix has attracted a series of Midwest-based firms in recent years, local legal recruiter Phyllis Hawkins said in January.
The rest of the first quarter mergers were scattered around the country, though none saw a U.S. firm expanding abroad. On the West Coast, Kilpatrick Townsend & Stockton entered Los Angeles by acquiring seven-lawyer intellectual property boutique Keats McFarland & Wilson; and San Francisco–based Sedgwick combined with Brown Eassa & McLeod, an 18-lawyer toxic tort boutique across the Bay in Oakland.
Four of the deals took place in Florida, including Adams and Reese adding 12 lawyers from Jacksonville’s Volpe Bajalia and FordHarrison gaining a five-lawyer shop in West Palm Beach.
Houston also continues to attract law firms drawn to the boom in energy work there. New York–based Wilson Elser Moskowitz Edelman & Dicker absorbed eight-lawyer Powers & Frost in January, according to Altman’s report. As The Am Law Daily has reported, several others firms, including Reed Smith, have opened new offices in Houston in recent months.
A year ago, many of the mergers in the first quarter were even smaller, with just one— McKenna Long & Aldridge acquiring Luce, Forward, Hamilton & Scripps—involving the acquisition of a firm with more than 16 lawyers.
Bowers says that, while not depicted in last quarter’s report, law firms continue to be interested in moving abroad, particularly into South Korea and Singapore, two countries that only recently opened their doors to foreign firms.
Cross-border mega-mergers also continue to take place. Earlier this week, the three-way combination of SNR Denton, Salans and Fraser Milner Casgrain official went live, bringing the world Dentons, a 2,500-lawyer firm with offices in 52 countries. The new firm emphasizes an evenhandedness among its locations, touting itself in a press release as "polycentric," with "no single headquarters and no dominant culture."