There were 85 law firm combinations announced in the United States in 2016 according to Altman Weil MergerLine. This is the fourth consecutive year that the total has hit 80 or more since 2013 when U.S. law firm merger and acquisition activity dramatically accelerated coming out of the recession.
"It's a post-recession reality that with market demand flat-lining the most-effective way to add new business is to acquire another law firm," says Altman Weil principal Tom Clay. "But as the supply of prime targets inevitably shrinks, we expect the competition to make high-quality deals will intensify in 2017."
The largest combination of the year was announced in mid-December when 1,900-lawyer, UK-based Eversheds and 400-lawyer, Atlanta-based Sutherland, Asbill, & Brennan voted to join forces as a new global law firm. The deal was one of eleven cross-border combinations announced last year, making 2016 a record year for international tie-ups.
Two other cross-border moves also involved London law firms acquiring U.S. firms. Clyde & Company added 18-lawyer Miami firm, Thornton, Davis, & Fein; and Holman, Fenwick, Willan acquired 17-lawyer Legge Farrow in Houston.
The largest international acquisition by a U.S. law firm in 2016 was Littler's acquisition of 170-lawyer French firm, Fromont Briens. Norton, Rose, Fulbright picked up 92-lawyer, Vancouver, Canada-based firm Bull Housser. Dentons moved into Central America by acquiring 75-lawyer Munoz Global in Costa Rica. Haynes & Boone and Holland & Knight both acquired small London law firms; and, DLA Piper added to its international footprint with the acquisition of three small law firms in Finland, Sweden, and Canada.
Domestically, a rare merger of AmLaw 100 law firms was announced in November between Washington, D.C.-based Arnold & Porter and New York-based Kaye Scholer, a combination that creates a new 1,000-lawyer Middle-Atlantic powerhouse. Southern regional firm Baker Donelson added 110-lawyer Baltimore-based Ober Kaler, growing to over 800 lawyers. Husch Blackwell expanded its Midwestern profile with 144-lawyer Whyte Hirschboeck in Milwaukee bringing its headcount to 700 lawyers.
California was the top in-bound destination for law firm acquirers in 2016. The largest California deal was Squire, Patton, Boggs' acquisition of 50-lawyer Carroll, Burdick, & McDonough in San Francisco. Phoenix-based Lewis, Roca, Rothgerber added 39 lawyer Glendale, California firm, Christie, Parker, & Hale. Paul Hastings and Blank Rome annexed small Los Angeles firms; and Fox Rothschild picked up a small firm in San Francisco. Overall eight law firms based outside of California entered or grew their presence in the state last year. Additionally, three California-based firms made in-state deals.
Along with the headline-grabbing large-firm combinations in 2016, there were a host of smaller acquisitions. Eighty-four percent of all law firm combinations announced last year were acquisitions of small law firms with 20 or fewer lawyers, and 52% of all deals were same-state combinations.
The complete list of 2016 law firm mergers and acquisitions and a ten-year trend summary are available online at www.altmanweil.com/MergerLine.
Published: Mon, Jan 30, 2017
