Summary: Law firms have their eyes on Texas as an ideal market to be part of, making the desire to merge with a law firm already located there high.
Texas law firms report receiving frequent inquiries from competitors to explore merger options. These corporate law firm leaders note they get a phone call at least once a month, sometimes even a visit from competitors with their offices outside the Lonestar state, according to the Houston Chronicle.
While these inquiries often lead to nothing, legal industry insiders say there is a rise in merger activity in Texas during the past three years. Houston-based Andrews Kurth Kenyon is a prime example of this. They announced last week that they were in the midst of merger discussions with Virginia-based Hunton & Williams.
Chairman Mark Kelly of Vinson & Elkins said, “No doubt, there will be further consolidation in the legal market in Texas. We have maintained the position that we would listen to offers, but I have no interest in being a 2,000-lawyer firm.”
Texas-based corporate law firms are on pace to break the record for the most corporate law firm mergers in Texas history. There are national and regional law firms working to expand into the state. These legal industry experts predict an intense consolidation during the next three years.
Chief executive officer Phil Appenzeller of Munsch Hardt added, “I get calls almost weekly seeking a merger. These are mostly law firms interested in moving into Houston or Dallas, or they already have a small presence here and they want to grow bigger, faster.”
Altman Weil reports 22 acquisitions or mergers with Texas-based corporate law firms since January 2016. There have been another 30 national mergers with law firms that have offices in Texas. Since 2011, there have been 450 U.S. law firm mergers.
Zeughauser Group law firm consultant Kent Zimmerman said, “There are strong Texas law firms who have employed me to help them evaluate possible merger partners. The interest is there on both sides – firms wanting to grow and acquire other firms, and firms wanting to merge with larger firms. I get calls all the time from non-Texas law firms asking me about possible combinations with Texas firms.”
Texas law firms are generally looking for partnerships that complement their firms by generating revenues that they couldn’t accomplish on their own. As Gardere Managing Partner Holly O’Neill said, “We still get calls from national law firms seeking an impactful merger. We are looking for expansion opportunities. If we do something, it needs to be one-plus-one equaling three. We do not want to grow just to grow.”
Mergers in the past two years include:
- New York-based Chadbourne Park merged with Houston-based Norton Rose Fulbright.
- New York-based Kelley Drye & Warren acquired Houston-based Jackson Gilmour & Dobbs.
- Jackson Walker acquired Hays Owens, an Austin-based boutique.
- London-based Holman Fenwick Willan acquired Houston-based Legge Farrow Kimmett.
- Coats Rose merged with Wright Ginsberg & Brusilow.
- New York-based Kenyon & Kenyon combined with Andrews Kurth.
Do you think Texas is just a phase or will it continue to be a stronghold for law firms? Share your comments with us in the comments below.
To learn more about law firm mergers, read these articles:
- Merger Discussions between Hunton & Williams and Andrews Kurth
- Kennedys Announces Merger with Carroll McNulty & Kull
- National Law Firms Pouring into State of Texas
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