Law firm merger activity slows during pandemic

There were 17 law firm combinations announced in the US in the first quarter of 2020 according to Altman Weil MergerLine, 37% less than the 27 deals in the same period in 2019. After an active month in January, when eleven deals were announced, volume declined to only five combinations in February and one in March.

“In the immediate-term, most if not all activity around law firm mergers and acquisitions has stopped,” says Altman Weil principal Eric Seeger. “But, even now, we’re hearing from firm leaders who want to be acquirers during the downturn. For the most resilient firms, there likely will be opportunities to make competitive moves this year, although right now no one can predict the timing.”

The largest deal announced in the quarter — the combination of AmLaw firms Troutman Sanders and Pepper Hamilton — has already been directly impacted by the COVID-19 crisis. Originally due to be finalized on April 1st, the combination is now scheduled to close on July 1st launching a new 1,000+ lawyer firm, Troutman Pepper.

The other significant deal of the quarter, announced in January and finalized in February was Duane Morris’s addition of 65-lawyer, New York City law firm, Satterlee Stephens. Acquisitions of New York City firms with more than 50 lawyers are rare occurrences, and this was only the fourth such acquisition since 2007 when MergerLine began tracking law firm combinations.

Four AmLaw firms based in the Midwest and western US picked up boutique firms in the first quarter. Snell & Wilmer acquired eight-lawyer commercial finance boutique, Assayag Mauss in Costa Mesa, California. Brownstein Hyatt added two-lawyer Hyperion Advisors, state government relations and regulatory experts in Las Vegas. Clark Hill bolted on the Law Offices of Carl Shusterman, a five-lawyer immigration boutique in Los Angeles. Michael Best acquired three-lawyer Austin start-up specialists, RWR Legal.

Labor and employment giant, Littler LLP expanded in Europe, announcing a combination with three-lawyer L&E firm Gerlach Rechtsanwalte in Vienna, Austria for the only
international combination of the quarter.

Eighty-eight percent of all Q1 combinations were acquisitions of firms with twenty or fewer lawyers. The top three states targeted for acquisition were California, Florida and New York.

The complete list is available at www.altmanweil.com/MergerLine.

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