The United States economy is still struggling to recover from the recession that hit nearly three years ago in 2008. One of the biggest examples of this is the number of companies that are absorbed by other companies in an effort to save jobs and money. One area of business that is not exempt from mergers is the legal sector. In fact, in the past couple of months, law firm merger numbers have risen in the United States. The number is staggering, up 79 percent from the month of January to the month of September this year. The 79 percent increase is compared to the same nine-month period from one year ago.
In the first nine months of 2011, 43 deals involving law firm mergers and acquisitions, which was up from the 24 from the same nine months last year. The company responsible for the data collection regarding the mergers and acquisitions in question is Altman Weil, which is a consulting firm. One major reason for the increase in mergers and acquisitions of law firms in 2011 is the United States economy has shown some signs of improvement after one of the worst economic downturns in the country’s history.
“During the recession and in the immediate aftermath of the recession, firms were in what I’m going to call a ‘survival mode,’ not a strategy mode,” Ward Bower, the Altman Weil principal said. “Now that the economy has grown, they’re dusting off their strategies.”
Quite a few of those strategies employed by the firms seem to focus on geographic growth, with several of the mergers and acquisitions involving interstate or international deals. The Pennsylvania legal market is on pace to finish the 2011 year in almost the same place it finished the 2010 year in when it comes to mergers and acquisitions of law firms. Between the same nine months in 2010, Pennsylvania had five mergers or acquisitions that involved one or more Pennsylvania firms. But during the same nine-month period in 2011 there were only six of those deals.
Since the third quarter began in 2011, there has been only one merger or acquisition featuring a firm from Pennsylvania, when Fox Rothschild acquired Chan Law Group from Los Angeles, California in August. Between 2010 and 2011, four of the Pennsylvania firms involved in deals to merge or acquire other firms were based in the city of Philadelphia. In 2011, Pittsburgh has not seen any deals involving mergers or acquisitions by any of its firms despite a ton of lateral moves by large numbers of firms this year. The majority of these moves usually involve whole practice groups or niche groups that focus on one industry. Plenty of firms in the Pennsylvania area have absorbed other firms in the Pennsylvania area to add lawyers with expertise in a specific industry to their ranks.