Are Law Firm Mergers Hot or Not? It Depends Who's Counting
However they interpret the current volume of deals, observers say law firms are laying the groundwork for a big 2020 for mergers.
October 01, 2019 at 06:18 PM
4 minute read
The original version of this story was published on The American Lawyer
Confused about the state of the law firm merger market? You're probably not alone.
That's because two legal industry consultancies that track law firm mergers issued very different assessments of merger activity for the third quarter of 2019 this week, with one detailing a slowdown and the other suggesting it was a summer of love for the industry.
Fairfax Associates on Monday said mergers were down compared to 2018, with fewer deals overall, and none of the 46 mergers it has counted so far in 2019 involving large law firms. Altman Weil, meanwhile, reported Tuesday that it had been a "record-shattering" quarter for mergers, with 38 law firms announcing plans to combine, and one deal—Indianapolis-based Taft Stettinius & Hollister linking up with Minneapolis-based Briggs and Morgan—creating a 600-lawyer firm.
The biggest difference between Fairfax and Altman Weil's assessments is spelled out in their releases: Altman Weil counts merger announcements—including those that may not be finalized for months—while Fairfax counts only completed mergers involving firms that have more than five lawyers.
This means deals like the one between Taft and Briggs, announced in August, won't show up in Fairfax's data until 2020, because the merger goes into effect in January 2020.
Not surprisingly, each of the consultancies stands by its own approach. "I think our data is more reflective of what's going on in the marketplace," Altman Weil principal Thomas Clay said.
Clay notes that while Altman Weil includes pending mergers, it requires more than speculation and only counts deals announced by the firms themselves—"all the i's and t's have been dotted and crossed," he said. The firm doesn't count merger talks that spill out into the public but ultimately fail, such as the long-reported negotiations between Allen & Overy and O'Melveny & Myers that collapsed last month.
"Speculation and gossip are of no interest to us," Clay added.
Fairfax analyst Lisa Smith acknowledged that there is difference between the firms' focus, adding that whatever the volume of new deals, there's been a notable lack of "market-shaking mergers" in 2019.
"It's the bigger combinations that drive consolidation," Smith said. "If there were 100 mergers of two-lawyer firms, they wouldn't make much of a difference in the legal market."
Thirteen of the mergers that were announced in Q3 2019 involved firms with four people or less, according to Altman Weil. This included Nixon Peabody acquiring a firm in Washington, D.C., that specialized in immigration issues, and Womble Bond Dickinson merging with an English IP boutique.
However you count them, the year in mergers feels lackluster because 2018 was such a banner year for combinations, said Zeughauser Group consultant Kent Zimmermann. A record-setting 106 law firm merger announcements were made last year, according to Altman Weil, while Fairfax found that 72 mergers were completed, which was higher than 2017′s numbers and the historical average between 2008 and 2017.
The average amount of time that elapses between when merger discussions start and when a deal is closed is nine months, Zimmerman said. And while they may not all be consummated in the end, he said he is engaged in "several active merger discussions" involving Am Law 100, Second Hundred and Global 100 firms.
"Some of those will go the distance," Zimmerman said.
Clay, Smith and Zimmerman each said they're seeing lots of discussions among law firms about merging or acquiring others, and they're all anticipating major law firm merger deals in 2020.
Apart from the upcoming merger of Taft and Briggs, 10 of the announced mergers Altman Weil reported involved global behemoth Dentons adding international offices to its ranks. Dentons' largest announced acquisition in Q3 2019 was Kensington Swan, a 113-lawyer firm in Auckland, New Zealand.
|Read More
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 Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllLatham, Kirkland Alums Land the Top GC Posts—Here's What It Means for Business Generation
10 minute readSettlement With Kleinbard in Diversity Contracting Tiff Allows Pa. Lawyer to Avoid Sanctions
3 minute readTrending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Abbott, Mead Johnson Win Defense Verdict Over Preemie Infant Formula
- 3Trump Files $10B Suit Against CBS in Amarillo Federal Court
- 4Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
- 5Guarantees Are Back, Whether Law Firms Want to Talk About Them or Not
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250