03 October 2018

US law firms mergers hit record-breaking pace

First three quarters of 2018 sees 79 combinations announced, and more are talking about it, while large firms are becoming serial acquirers.

There were 27 US law firm mergers and acquisitions announced in the third quarter of 2018, and 79 deals year-to-date, according to Altman Weil MergerLine, the largest number of combinations ever reported in the third quarter of the year.

Serial acquirers

The business activity is also the highest cumulative total for the first three quarters. Altman Weil principal Eric Seeger said, ‘almost every law firm we work with is actively considering its merger options in 2018, and some large firms are becoming serial acquirers,’ adding ‘but while large firms are increasingly aggressive about growth, we think an underlying shift in attitude at small and mid-sized firms, driven by both threat and opportunity, is what is pushing the law firm merger market into record-breaking territory.’ The largest deal announced in the third quarter of 2018 was the combination Philadelphia-based Fox Rothschild and Smith Moore Leatherwood based in North Carolina. In another big combination, Washington, DC-based Venable announced that it would acquire New York City intellectual property law firm, Fitzpatrick Cella Harper & Scinto.

International activity

Some of the largest law firms continued to set their sights outside of the US. DLA Piper made its second cross-border acquisition of 2018, acquiring Delacour in Copenhagen.  Littler announced they would acquire employment firm Reliance in Brussels, their second European acquisition this year.  Dentons made its eighth international acquisition in 2018, adding Larrain Rencoret Urzua in Santiago. A number of AmLaw 200 firms made small US acquisitions in the quarter, all apparently driven by the pursuit of particular practice specialties. Of the 27 law firms targeted for acquisition in July, August and September, 22 (81 per cent) were small firms with between 2 and 20 lawyers. The complete list of law firm mergers and acquisitions announced to date in 2018 as well as a summary of 2017 deals are available online.  A retrospective report and analysis of MergerLine data since its inception, Ten Years of Law Firm Mergers and Acquisitions: 2007-2016, was released in March 2017 and is available to download.