The evidence is unambiguous: mergers increase profitability. The merged entities resulting from intra-Am Law 200 combinations climb an average of 23 places in the profit per equity partner (PPP) rankings from the five-years before to the five years after the merger. Average compensation for all partners rises by a comparable amount—18 places over the same time period.

Conventional wisdom has it that mergers enhance profitability through increased revenues and reduced costs: more cross selling across practice areas and offices increases revenues; greater leveraging of scale economies reduces costs per lawyer. However, the numbers contradict this view: post-merger revenues are lower relative to competitor firms than are the sum of the predecessor firms’ revenues, and costs per lawyer increase markedly.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]