Summary: This year may see the highest number of mergers and acquisitions in law firm history.
Watch out, boutique associates. You may want to start hoarding coffee mugs and pencils with your firm’s name on it; they could have resale value on eBay soon. The mergers and acquisitions craze has hit the legal industry, and they’re coming for boutique firms like yours.
Altman Weil, a legal consultancy firm, has released a report that states law firms are on track to break records for the number of mergers this year.
At least 68 firms merged in the first three quarters of this year. In the nine years that Altman Weil has been keeping track, this is the most of any year to date. Twenty mergers were announced in the third quarter alone.
Law firms are offering many reasons for this trend. The burgeoning economy is encouraging firms to add to their ranks quickly. Lateral hiring is expensive and takes time; it’s often more expedient for firms to swallow up smaller, established practices.
Want to expand your practice? Want to add an office location to your letterhead? The acquisition of a boutique is seen as a fast and easy way to grow. The boutique’s clients usually follow it to the new, parent firm. In contrast, clients often stay with the original firm when a firm snags a lateral hire.
Analysts say IP boutiques are the hottest commodities in the current market. IP firms that specialize in litigation are even more in demand.
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Specific areas of the country are seeing more mergers than others. Mergers have exploded in the Midwest–and especially Chicago–in the last quarter. Firms with similar interests and clients are realizing that, instead of competing with each other, they should merge and tackle large projects together.
The previous merger record was 88 back in 2013. This year only needs 18 more mergers to tie the score. As the last quarter is usually the most active, analysts predict the record will easily be broken.
In recent days, Littler Mendelson announced it is acquiring the German firm, Vangard. Nixon Peabody has also said it’s taking on CWL Partners in Hong Kong. There are rumors of other mergers and acquisitions in the air, including the marriage of Pillsbury Winthrop Shaw Pittman and Chadbourne & Parke.
Photo: legalcrunch.com