Law Firm Mergers Level Off in US But Continue at a Steady Pace Abroad
Law firm mergers seem to be leveling off among U.S. legal shops but continuing at a steady pace among foreign competitors, according to recent surveys.
Although there were more U.S. law firm mergers so far in 2012 than in 2011, the level of activity in the second quarter is down from the first quarter, and the five completed mergers in the second quarter all involved the acquisition of small firms of less than a dozen lawyers, according to the latest Hildebrandt Institute MergerWatch Report.
Added to the 20 mergers completed in the first quarter of 2012, that puts the total for the first half at 25, compared to 22 completed mergers for the same period in 2011. Before the full impact of the recession was felt, there were 42 mergers in the first half of 2009 and 36 in the first half of 2008.
Meanwhile, foreign law firm mergers continued at a steady pace, with 20 completed in both the first and second quarters of 2012, according to a press release about the survey.
The 20 foreign law firm mergers completed in the second half of 2012 is up from 15 in the second quarter of 2011 and nine in the second quarter of 2010.
And there have been several major foreign mergers either announced or completed this year, such as the 1,500-attorney combination of Pinsent Masons and McGrigors and the planned melding of Herbert Smith and Freehills into a 2,800-lawyer firm.
Among U.S. firms during the same time period, perhaps the most noteworthy development has been the implosion of Dewey & LeBoeuf, a product of an earlier megamerger. Its affairs are now being wound up under a bankruptcy judge’s supervision.
Statistics complied by Altman Weil MergerLine also suggest a slowdown: While there were 14 announced law firm mergers during the first quarter of 2012, compared to an average of 15 in recent quarters, the legal consultant has just reported that there were only 10 announced in the second quarter of 2012, as JD Journal points out.
In the press release, Hildebrandt describes a “somewhat cautious” attitude among law firms in a “difficult” business environment.
Boston Business Journal: “Law firm M&A slowdown pinned to ‘Dewey Effect’ “
Legal Week: “Pinsents set for first redundancy round since McGrigors merger”