The first quarter of 2009 was a busy one for law firm pairings, according to Altman Weil’s latest MergerLine report.
During the first three months of the year, law firms announced 24 mergers and acquisitions. Additionally, 12 previously announced mergers went into effect.
The new mergers primarily involved the acquisition of smaller firms — those with 25 or fewer attorneys. Only one merger occurred between two sizable firms, which was K&L Gates’ combination with Bell, Boyd & Lloyd, a Chicago firm with about 250 attorneys.
Altman Weil principal Thomas Clay attributes the dearth of large-firm mergers to the fact that bigger firms generally have been hit hardest by the economy, specifically with the evaporation of capital markets and corporate legal work.
“The bulk of these deals were in the works in 2008,” Clay said. “As law firms got a look at how 2009 was shaping up, the activity definitely slowed but didn’t stop.” Clay said he doesn’t think that the relatively high number of couplings in the first quarter indicate that 2009 will be a hot year for mergers.
Instead, he said that the merger market may well cool off as the year wears on. He added there do not appear to be a significant amount of law firm pairings in the pipeline right now.
“We don’t think you can take the first quarter figure and multiply it by four to get an idea of what we will see,” Clay said. “We think it will be something less than that. There aren’t any white knights out there, but there are some firms that are still looking, if they are in the right position.” Many firms may be more focused on stemming their own financial losses and attorney layoffs than aggressively pursuing mergers, Clay said.
Six more firm mergers took place in the first quarter of 2009, compared with the same period in 2008, when 18 combinations were announced.
There was also an international element to the recent merger announcements, with two large firms acquiring smaller ones outside the United States. Jones Day scooped up Mexico City firm De Ovando y Martinez del Campo, while McGuireWoods acquired Grundberg Mocatta Rakison in London.
Among the prominent mergers that went into effect in the first quarter of 2009 were the combination of Bryan Cave and Powell Goldstein, and the merger between two Kansas City firms to become 500-attorney Polsinelli Shugart.
