Legal consultancy Altman Weil has released its first-quarter law firm merger report, which notes that after a record-setting year in 2013, the pace of combinations among firms has continued in 2014, with smaller acquisitions dominating the market.
Of the 22 deals announced so far this year, approximately 82 percent involved firms with less than 15 lawyers, according to the quarterly analysis by suburban Philadelphia-based Altman Weil, which tracks law firm transactions on its website.
At least two Am Law 200 firms have absorbed smaller shops within the past week. Wilson Elser Moskowitz Edelman & Dicker announced Tuesday that it would take on 15 lawyers and staffers from San Francisco’s Hake Law, a firm that specializes in construction and product liability litigation. Holland & Hart said last week that it had acquired three-lawyer tax boutique Crapo Smith in Salt Lake City.
Sutherland Asbill & Brennan announced last month that it would acquire nine-lawyer commodities boutique Arbis to pick up offices in London and Geneva, according to sibling publication the Daily Report. In February, Dinsmore & Shohl bolted on 35-lawyer Cincinnati firm Peck Shaffer & Williams, while McCarter & English absorbed 14 attorneys from Washington, D.C.–based energy boutique Miller, Balis & O’Neil, according to sibling publication New Jersey Law Journal.
The largest merger so far this year was Buchanan Ingersoll & Rooney’s mid-March tie-up with Florida’s Fowler White Boggs—no stranger to merger deals—a union sparked by a college friendship between partners at both firms. The Daily Business Review, a sibling publication, reports that the union will create a 530-lawyer firm that could vault Pittsburgh-based Buchanan Ingersoll into The Am Law 100.
Altman Weil principal and law firm merger guru Ward Bower, who spoke with The Am Law Daily earlier this year about the trend toward smaller deals, told us Wednesday that the increased abundance of modest transactions is simple.
“They’re just easier to do, and many of the megamerger prospects aren’t out there,” Bower says. “Many of the large firms that had been inclined to do a deal in the past have already done so.”
Of course, many Am Law 200 firms are always talking about potential deals. Bower cites the recent interest expressed by Dentons in a deal with Patton Boggs—already in discussions of its own with Squire Sanders—as an example of a potential deal on the horizon. (Dentons confirmed in a statement to The Am Law Daily and sibling publication The National Law Journal that it has “made a serious overture to Patton Boggs leadership about a combination” and that it holds the struggling lobbying giant “in high regard.”)
Bower says that it’s possible a large merger of equals will happen later this year, “perhaps with an international component,” but adds that it’s simply “too early to tell” what might materialize. He notes that large firms are attracted to doing smaller deals because it allows them to remain competitive by essentially “buying” specific practice groups instead of building them out over time.
While the next big deals loom on the horizon, in the interim, many regional and NLJ 350 firms have remained active in the minimerger space. Butler, Snow, O’Mara, Stevens & Cannada, a 275-lawyer firm based in Ridgeland, Miss., which expanded into New York in February, announced this week its addition of a two-lawyer labor and employment shop in Memphis.
Meanwhile, Cleveland-based McDonald Hopkins grew to roughly 140 lawyers in February following its addition of six-lawyer Columbus litigation shop Welin, O’Shaughnessy & Scheaf. In January, Philadelphia-based insurance defense firm Marshall Dennehey Warner Coleman & Goggin announced plans to hit the 500-lawyer mark by merging on July 1 with New York’s Jones Hirsch Connors Miller & Bull, according to sibling publication The Legal Intelligencer.
The first quarter also saw a handful of notable mergers abroad, although activity was not nearly as robust as in the U.S. In the U.K., where London-based Altman Weil alliance partner Jomati Consultants also tracks law firm tie-ups, only five deals were announced in the first three months of 2014. The largest saw Blake Lapthorn, which held merger talks with two other mid-tier British firms late last year, announce last month plans to form a 450-lawyer firm with one of them, Morgan Cole.
The Asian Lawyer, a sibling publication, reported in February on Australian mid-market firms Thomsons Lawyers and Herbert Geer forming a 230-lawyer, 80-partner shop called Thomson Geer to go live on March 31. Chinese legal giants Jun He Law Offices and the Zhong Lun Law Firm are also in discussions about forming a combined 1,300-lawyer firm, potentially spawning a wave of consolidation among the country’s top firms, according to a report this week by The Asian Lawyer.
China isn’t the only emerging market where big firms are mulling the merits of doing business together. In India, another developing legal industry, leading local shop J Sagar Associates has merged with Chennai-based Vichar Partners to create a 300-lawyer firm that went live on Tuesday, according to Legally India.