Law Firms Mostly Shun Big Mergers in Third Quarter
At first glance, this year’s third quarter seemed to be an improvement for law firm mergers. Thirteen law firm combinations were announced, up from seven deals in the second quarter.
But most of the combinations were small, the legal consulting firm Altman Weil reports. “This reflects the continuing caution of law firms in response to the recent economic turmoil,” Altman Weil principal Bill Brennan said in a press release.
“Law firms do not want to assume the risks inherent with big mergers right now,” he said. “Instead they are acquiring small firms or groups of lateral partners with portable business.”
One large deal reported during the time period was Bingham McCutchen’s acquisition of 120-lawyer firm McKee Nelson. Other acquisitions by larger law firms included: Howrey acquired intellectual property law firm Day Casebeer Madrid and Batchelder; Jackson Lewis acquired the five-lawyer Michigan employment firm Rubin Shulman; and Cincinnati-based Dinsmore & Shohl combined with Woodward Hobson & Fulton in Louisville, Ky.
Brennan suggested that the cautious environment may be misguided. “Contrary to conventional wisdom, the best time to expand via a merger or acquisition is often during a recession because there are better deals to be had at more attractive terms,” he said.
