American law firm merger market surges in Q1

There are three distinct tracks for law firm mergers and acquisitions

American law firm merger market surges in Q1
There were significantly more law firm mergers and acquisitions announced in the US during the first quarter of 2017 compared to the same period last year.

According to Altman Weil MergerLine, there were 28 deals announced in the country during the period, a marked increase from the 20 combinations announced during the same period in 2016.

“The law firm merger market really has three distinct tracks right now,” said Tom Clay, Altman Weil principal. “There’s an extremely active and competitive market for small law firms, with acquirers of all sizes in the hunt. There’s a growing interest in overseas expansion that is almost exclusively the province of very large law firms. And there are infrequent but important large mergers that are potential game changers for the two firms and can directly impact the competitive landscape.”

The largest deal in the US during the first quarter is the merger between 3,700-lawyer firm Norton Rose Fulbright and 300-lawyer firm Chadbourne & Parke, according to MergerLine data. However, the company, which provides management consulting services to legal organisations, said that combinations like this are rare, with only ten acquisitions of US law firms with 300 or more lawyers recorded from 2007 to 2016.

The only other acquisition of a firm with more than 100 lawyers was DLA Piper’s announced acquisition of LETT, one of Denmark’s largest law firms with 150 lawyers. DLA Piper also announced its merger with Lisbon firm ABBC during the quarter, while Dentons said it is acquiring Amsterdam-based firm Boekel de Nerée.

The consultancy outfit said that five cross-border deals were announced in the first quarter, all of which were made by “megafirms” that have more than 1,000 lawyers. Most acquisitions, at 85.7%, were for firms with 20 or fewer lawyers. The Mid-Atlantic and Southern regions were most active in the first quarter with 29% of the deals, followed by the Midwest and International categories at 18% each, and the West and New England regions at 4% each.

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