Law Firm Mergers On Record Breaking Pace in 2017

This week, the Los Angeles boutique Liner completed its merger into DLA Piper, a deal that combined a small boutique of roughly 60 lawyers with a law firm that is approaching 4,000 lawyers with offices around the world.

“It’s unusual to see a … firm [like that] joining a huge global mega firm — that’s a dramatic change for them,” said Eric Seeger, a principal at the law firm consultancy Altman Weil.

But according to data compiled by his firm, mega firms are increasingly finding small boutiques to join their fold: Through the first three quarters of 2017, there have been a record 76 law firm combinations — 16 of those deals, or 21 percent, involved at least one law firm with more than 1,200 lawyers, according to data released Tuesday by Altman Weil.

That still means that most of the mergers this year were small- and medium-size firms growing incrementally larger, but Seeger said the large mega law firms with thousands of lawyers, including not only DLA Piper, but also Dentons, Hogan Lovells and others, are accelerating their growth rate.

“Once you have thousands of lawyers worldwide you’re pretty much committed to being a huge firm that is everywhere,” said Seeger. “They seem to be looking to fill in gaps wherever they may exist [in terms of locations].”

After dropping in 2009 and 2010, it took two years before the number of annual law firm mergers returned to pre-recession levels. Since 2013, there have consistently been more than 80 law firm mergers per year, according to the firm’s data, and Seeger predicted that there could be 100 law firm mergers this year, breaking the previous high of 91 in 2015.

Data from Altman Weil. Note: 2017 numbers projected. (Graphic: Gabe Friedman)

Data from Altman Weil.
Note: 2017 numbers projected. (Graphic: Gabe Friedman)

Other examples of mega firm mergers this past year include:

  • DLA Piper acquired two other firms, Copenhagen’s 150-lawyer LETT and Lisbon’s 50-lawyer ABBC.
  • The 8,500-lawyer Dentons announced three international mergers just in the last quarter alone, including with Scotland’s 200-lawyer Maclay Murray & Spens; and with Uganda’s 26-lawyer Kampala Associated Advocates; and with Uzbekistan’s 10-lawyer Avent Advokat.
  • In 2017, Dentons has announced seven mergers, including with firms in Netherlands, Mexico, Myanmar and Peru.
  • In June, the 2,600-lawyer Hogan Lovells acquired the 25-lawyer Boston boutique Collara.
  • In May, the 1,200-lawyer Littler Mendelson acquired the 16-lawyer London boutique GQ Employment Law.
  • In February, Norton Rose Fulbright acquired New York’s 300-lawyer Chadbourne & Parke.

“Some firms feel stuck and don’t see a path to grow other than by merging,” he said, adding “mid-size ain’t what it used to be, and now you see 400-, 500-, 600-lawyer firms thinking they need to be bigger to compete for the largest work.”

Read Big Law Business’s story on 900-lawyer Winston & Strawn’s growth plans. 

Peter Zeughauser, a consultant who advises law firms on mergers, said that in the past month alone, the chairs of three different 800-lawyer law firms have told him they feel small.

He noted there are plenty of boutiques and mid-sized law firms that are thriving, but that “growth for growth’s sake” is being taken more seriously as a strategy.

“Size alone has benefits,” he said, pointing to an Acritas survey  about global law firm brand recognition.

“Those are the two key takeaways,” said Zeughauser, “how big you are, drives how well known you are, and how well known you are drives how favorably you’re thought of.”

Contact the reporter responsible for this story: Gabe Friedman at gabefriedman@outlook.com.

Contact the editor responsible for this story: Casey Sullivan at csullivan@bloomberglaw.com.

Related posts

Top