Nineteen law firm mergers and acquisitions were announced in the United States during the third quarter of 2013, according to Altman Weil MergerLine.
So far this year, there have been a total of 58 law firm combinations — up 41 percent compared with the first three quarters of 2012.
The largest deal of the year so far was announced in late September.
Stinson Morrison Hecker, a Midwestern law firm headquartered in Kansas City, announced it would merge with Minneapolis-based Leonard Street and Deinard.
The combination will result in a new 500-lawyer firm.
This is the third big merger in recent years involving Kansas City law firms.
In 2009, two Kansas City based firms, Polsinelli Shalton Flanigan Suelthaus and Shugart Thomson & Kilroy merged to form Polsinelli Shugart.
In 2008, Blackwell Sanders, headquartered in Kansas City, combined with St. Louis based Husch & Eppenberger, forming Husch Blackwell.
“A large combination of similarly sized firms — what we call a ‘merger of equals’ — is relatively rare,” according to Altman Weil principal Tom Clay who advises law firms on mergers and acquisitions. “There have been fewer than a dozen in the last six years, and the majority have been between Midwestern law firms.”
“Midwestern firms that have maxed out in their local markets can leverage the merged firm’s larger, more diverse platform to build visibility and credibility and to create a stronger economic base for future growth,” he said.
The other sizeable combination announced in the third quarter of 2013 was that of Lewis and Roca, a 175-lawyer firm based in Phoenix, and Rothgerber Johnson & Lyons, a 75-lawyer Denver-based law firm.
All other deals announced in the third quarter were acquisitions of small law firms with 15 or fewer lawyers.
Large law firms continued to expand their reach with targeted acquisitions.
Ballard Spahr and Schiff Hardin both picked up small New York City firms in July. Blank Rome acquired a Houston maritime boutique in August, and Thompson Coburn planted its flag in Los Angeles in September.
Detroit-based Clark Hill made its second acquisition of the year, adding four-lawyer Phoenix construction law firm Folk & Associates.
“When demand is flat, acquiring a small firm and its clients is probably the easiest way to get new business,” says Clay. “There is virtually no risk for the acquirer.”
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