More than 80 law firms combined in 2014
Report: tie-ups remain popular moves, especially in western, southern states
By Melanie Brisbon
Daily Journal Staff Writer
2014 was a lively year for law firm mergers with 82 combinations in total, according to data released by Altman Weil MergerLine. Though that marks a 7 percent decrease from last year’s 88 combinations, it is the second highest annual total recorded in eight years.
The increase in law firm tie-ups can be attributed to a changing economy and growth strategies by law firms, according to legal experts.
“On one hand, business is getting better and there’s been an upswing, but more lawyers seem to be competing for lesser work,” said Sandy Lechtick, legal consultant and president at Esquire Inc. “We’re seeing more firms, particularly small and midsize firms, that are looking at their growth strategy.”
Because it often takes a long time for a firm to grow just through lateral hiring, mergers have become an alternative strategy, Lechtick said.
More than half the acquisitions last year took place in law firms in the western and southern parts of the country, particularly in California and Texas.
“Those are two of the most active markets in the country,” said Peter Zeughauser, legal consultant at the Zeughauser Group, who added that states with big economies are attractive to law firms.
Some of the California-based combinations last year were Barger & Wolen LLP in Los Angeles, which was acquired by Chicago based Hinshaw & Culbertson LLP; Hake Law APC in San Francisco, which was acquired by Wilson Elser Moskowitz Edelman & Dicker LLP; Weingarten Brown LLP in Los Angeles, which was acquired by Venable LLP; and Peitzman Weg in Los Angeles, which was acquired by Robins, Kaplan, Miller & Ciresi LLP.
“California is without question one of the most competitive markets in the world, so firms are attempting to gain a strategic advantage,” Lechtick said. “Recruitment is becoming more important as part of their growth strategy.”
The largest combination of last year was Squire Sanders’ acquisition of Patton Boggs, a struggling public policy firm. The combined firm now has more than 1,500 lawyers.
Another combination was Morgan Lewis & Bockius LLP’s mass lateral hire of more than 220 attorneys from Bingham McCutchen LLP.
Lechtick said he anticipates those kind of acquisitions will continue.
“I think it’s smart because you’re able to cherry pick and get the attorneys you want,” he said.
Though the number of law firm mergers in 2014 decreased from 2013, the decline may not necessarily indicate the end of an ongoing trend, legal experts say.
“The numbers [of mergers] have been creeping up in recent years,” Zeughauser said. “I think we’d have to see what the numbers are for this year before we could say it’s a decrease of a long time trend.”
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