Following a years-long trend, 27 law firms merged in the first quarter of 2019.
Legal consultancy Altman Weil said the mergers continue a rapid pace from last year. In 2018, the legal industry saw a record-setting 106 law-firm mergers. All of the mergers so far this year have been acquisitions of small law firms. It suggests that if you have fewer than 20 lawyers, your firm could be next.
Small Firm Movement
Altman Weil's Eric Seeger said acquisitions of small law firms can be smoother than mergers with large firms. Smaller firms usually provide a higher return on investment, he said. "We'll continue to see the occasional 'large plus large' merger, but most of our large law firm clients are pursuing serial acquisition strategies rather than big, identity-changing mergers," Seeger told Bloomberg.
He said a well-branded boutique firm can open doors for larger firms to compete in new areas. It's about being in the right place at the right time. Big firm mergers can be complicated with compensation, client conflicts, and leadership changes. Lateral moves may also shed clients as lawyers leave rather than follow the merged firm.
Porter Wright, a 200-lawyer firm based in Ohio, took on 19 lawyers from Butler Rubin Saltarelli & Boyd to get into the legal market in Chicago. It was the largest acquisition so far this year. Meanwhile, San Francisco's Littler Mendelson expanded its operations in Europe by acquiring 12 lawyers at Homble Olsby in Oslow. Michigan's Clark Hill acquired O'Gradys Solicitors' nine lawyers in Dublin.
The pattern has been going on for years. In 2015, for example, 48 mergers took place in the first six months. It was the fastest rate since Altman Weil started following mergers.
Seeger, a principal at the firm, said sometimes a merger is a succession strategy. Many small firms merge when a founder retires, he said. Sometimes mergers may foreshadow layoffs. So if you sense a merger coming your firm's way, you may want to look for another way to make a living.