The number law firm combinations dipped slightly in the second quarter compared to last year’s Q2 figures, but merger activity is on track for a strong year.
Data released July 5 by Newtown Square, Pa.-based legal consultant Altman Weil Inc. reported 24 law firm mergers and acquisitions in the second quarter of 2017, down from last year’s Q2 total of 28.
Eric Seeger, Altman Weil principal, told Big Law Business he expects the total number of law firm combinations to equal or exceed 85, the number of deals in 2016. Activity in 2017 may even reach or push past its 2015 level, when 91 deals -- the most of any year in the past decade -- were announced.
“The volume of merger activity remains high. The number of firms telling us they are interested in possibly doing a major deal is higher than it’s been in 10 years,” Seeger said.
Some larger firms, including Norton Rose Fulbright and Fox Rothschild, continued their recent acquisitive behavior in the second quarter with one announced deal each. Dentons announced two combinations during the quarter and on July 3 another: Uzbekistan 10-lawyer firm Avent Advokat. Hogan Lovells announced it combined with Collora, a Boston-based litigation firm with a focus on health care and life sciences, during the second quarter as well.
“We see firms that have been acquisitive and want to continue their expansion and momentum, firms that are struggling and scared and feel like they need to change directions, and firms that just want to be opportunistic and receptive to offers that come their way,” Seeger said.
Dim Outlook for Demand
Mergers and acquisitions involving smaller firms continue to drive activity. A total of 71 percent of second-quarter acquisitions involved law firms with 20 or fewer lawyers, the data said.
Large law firms report demand for legal services is flat and they aren’t optimistic about the demand outlook for 2017 and 2018, Seeger said, which may explain why smaller firms are being targeted by larger institutions.
Some deals during the quarter involved no big law firms, such as the April acquisition by West Hartford-based Seiger Gfeller Laurie LLP of three-lawyer firm Krasow Garlick & Hadley, increasing the number of lawyers at Seiger Gfeller Laurie to 14.
About one-fifth of the second-quarter deals involved a non U.S. firm. One of the largest was Winston-Salem, N.C.-based Womble Carlyle Sandridge & Rice’s combination with United Kingdom-based Bond Dickinson to form Womble Bond Dickinson, which will formally launch in October. The number of cross-border deals will continue, as especially larger firms seek to enter new markets and enhance their global brands, Seeger said.
The second-quarter data and a report describing merger and acquisition activity 2007-2016 are available at http://www.altmanweil.com/MergerLine/.