Data released on Monday by legal consultancy Fairfax Associates reveals a notable increase in law firm mergers during the first half of 2023 compared to the same period in 2022 and 2021. According to Fairfax, a total of 28 law firm mergers were completed in the first six months of this year, surpassing the 25 deals achieved in both 2022 and 2021 during the corresponding time frames.
The second quarter of 2023 witnessed 11 mergers, following a flurry of merger activities among large firms in the first quarter. This marks a similar trend to 2022, where 11 mergers were completed in the second quarter following a slower start to the year. While law firm mergers experienced a drop during the COVID-19 pandemic, there has been a rebound in recent times. However, the 28 mergers in 2023 fall slightly below the historical average for the first half of the year over the past decade, which Fairfax Associates reports to be 32 combinations.
Fairfax highlights that law firms’ interest in mergers remains high, as observed in previous quarters. Despite potential challenges arising from larger and more complex combinations, the consultancy anticipates a rise in deal activities during the second half of 2023 and into 2024.
The largest merger completed in the second quarter of 2023 involved Alabama-based Maynard Cooper & Gale and Carolinas-based Nexsen Pruet. These firms merged on April 1, resulting in the formation of Maynard Nexsen, a 550-lawyer firm. Additionally, several mergers took place in the Midwest, including the merger between Bricker & Eckler and Graydon Head & Ritchey, which led to the establishment of Bricker Graydon. Armstrong Teasdale combined with litigation firm Novack and Macey, while Hinshaw & Culbertson joined forces with aviation-focused civil litigation firm Adler Murphy & McQuillen. Several other mergers were completed across various U.S. regions, including two cross-border deals. Holland & Knight absorbed Bogotá-based firm Cuberos Cortés Gutiérrez, and global mega-firm Dentons finalized its combination with Indian law firm Link Legal, which had been announced the previous year.
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Looking ahead, there are potential mergers on the horizon. London-founded Allen & Overy and New York-founded Shearman & Sterling disclosed their plans to merge in May, potentially creating one of the largest law firm combinations in decades. According to statements from both firms, the combined entity would boast approximately 3,900 lawyers and a global revenue of approximately $3.4 billion.
An Allen & Overy spokesperson indicated that the firms will soon announce the timing of the partnership vote, while a Shearman spokesperson had previously mentioned that the partners were targeting mid-July for voting on the proposed merger. Approval by at least 75% of the partnership at each firm is required to proceed with the deal.
The first half of 2023 has witnessed a surge in law firm mergers, outpacing the merger activities of the same period in previous years. Despite challenges associated with larger and more intricate combinations, the legal industry remains poised for further consolidation in the coming months, with significant mergers anticipated in the second half of 2023 and beyond.
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