Boston Forecast Sees More Law Firm Mergers Ahead
A new survey by Zeughauser Group found nearly a third of Boston law firm leaders open to combining with another firm in the next three to five years.
January 15, 2019 at 02:58 PM
3 minute read
The legal boom in Boston is far from over, a new survey by legal management consulting firm Zeughauser Group suggests.
Of nearly 40 managing partners and other senior leaders of Boston law firms ranging in size from 10 to 200 attorneys, 71 percent reported that they were approached to combine with another firm over the past year.
Thirty-one percent of firms said they would consider a combination with another firm within the next three to five years. And, of those firms interested in a combination, 55 percent said they would be interested in a combination with a larger firm.
And for firms that are looking to enter the market, this signals a clear opportunity. “There's no shortage of large firms that would like to acquire high-quality smaller firms in Boston,” said Kent Zimmermann, a consultant at Zeughauser Group.
“The reality is they're out there and you need to know where to look,” he said.
Law firm leaders in Boston are also feeling pressure from the increased competition for legal work and talent in the city. About 26 percent said they expect the level of competition from non-Boston-based law firms in the city to grow significantly, while 69 percent said they think it will grow somewhat.
As larger and more profitable firms expand into regional markets, either entering or growing there, it's changing the competitive landscape, Zimmermann said, likening Boston's boom to what has been seen in Dallas, Houston and Los Angeles.
Boston, which has become an investment magnet for the technology and life sciences industries, has a particular draw for law firms these days, he noted.
“Legal is a follow the money profession,” Zimmermann said.
Arent Fox, Kirkland & Ellis, Hogan Lovells, Quinn Emanuel Urquhart & Sullivan, Womble Bond Dickinson and, most recently, Orrick, Herrington & Sutcliffe and Freeman Mathis & Gary, are all recent entrants to the market, chasing both local clients and national legal talent based in the city.
And for Boston-based firms, that has made growing organically much more difficult.
“The decision is being made at many firms to put all options on the table to achieve their aspirations,” Zimmermann said, which includes a combination with another firm.
The survey also found that Boston-based law firms are prioritizing growth in their litigation sectors. Forty-nine percent of law firms said they would like to add to their litigation teams in the next three to five years.
Labor and employment followed as a close second, with 43 percent of firms prioritizing the area for growth.
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