Geographic expansion drives record setting law firm merger market in Q3

U.S. law firm mergers and acquisitions continued strongly through the third quarter of 2017, according to Altman Weil MergerLine. There were 24 combinations announced in July, August and September, and there have been 76 deals announced year-to-date.

"Seventy-six law firm mergers and acquisitions is the largest number ever recorded for the first three quarters of the year," says Altman Weil principal Eric Seeger. "I won't be surprised if we see 100 deals by year end, easily beating the prior benchmark high of 91 in 2015."

Two of the largest deals of the quarter involve Philadelphia-based law firms expanding into the midwestern U.S. for the first time. Ballard Spahr announced plans to acquire 136-lawyer, Minneapolis-based Lindquist & Vennum, which will bring their total headcount to over 650 lawyers firmwide. Saul Ewing combined with 140-lawyer, Chicago-based Arnstein & Lehr to create a new 400-lawyer firm, Saul, Ewing, Arnstein, & Lehr.

Los Angeles was a target for two sizeable acquisitions announced in July. Clark Hill, a 350-lawyer firm headquartered in Detroit, added its first California and Nevada offices with the acquisition of 90-lawyer Los Angeles-based, Morris, Polich, & Purdy. DLA Piper, a 3,800-lawyer New York City-based firm, will double its Los Angeles presence after bolting on 60-lawyer Liner LLP.

"Geographic expansion appears to be a primary driver of the big deals announced last quarter," according to Seeger. "Law firms are always on the lookout for opportunities to grab market share in hot markets, but mid-sized and large firms are also increasingly interested in filling gaps in their geographic footprint to better serve their regional, national and international clients."

Mega law firm Dentons announced three international acquisitions in the quarter. The firm will add to its global footprint with 200-lawyer Maclay, Murray, & Spens, headquartered in Glasgow, Scotland; 10-lawyer Avent Advokat in Tashkent, Uzbekistan; and, 26-lawyer Kampala Associated Advocates in Kampala, Uganda. These are the fifth, sixth and seventh international acquisitions for Dentons in 2017, following additions in the Netherlands, Mexico, Peru and Myanmar in the first half of the year.

Acquisitions of law firms with twenty or fewer lawyers accounted for 71% of all combinations in the third quarter of 2017. These small deals were split about equally between same-state consolidations and practice-driven pick-ups. The Midwest and Western United States were the most active regions in the quarter, with California as the number one in-bound destination.

The complete list of law firm mergers and acquisitions announced to date in 2017 is available online at www.altmanweil.com/MergerLine. 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 at www.altmanweil.com/AWML10.

Published: Tue, Oct 24, 2017

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