Law Firm Merger Activity Slows Amid Coronavirus Crisis

Download a copy of the 2020 Q1 charts

Law Firm combinations down 37% in first quarter

April 1, 2020 — 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.

"Because smaller firms are more vulnerable to economic stressors, some may seek to be acquired this year as a rescue strategy," observes Altman Weil principal Tom Clay. "We expect small firm acquisitions will continue to dominate law firm merger market activity in 2020."

About Altman Weil MergerLine™
Altman Weil MergerLine™ logs law firm combinations as they are reported by media outlets and in press releases; links the user to the original news stories; and, compiles key statistics on each deal.  The complete list of law firm mergers and acquisitions announced to date in 2020 as well as reports and analysis of the law firm merger market since 2007 are available online at www.altmanweil.com/MergerLine.
     
About Altman Weil
Founded in 1970, Altman Weil, Inc. is dedicated exclusively to the legal profession.  It provides management consulting services to law firms, law departments and legal vendors worldwide.   The firm is independently owned by its professional consultants, who have backgrounds in law, industry, finance, marketing, administration and government.   More information on Altman Weil can be found at www.altmanweil.com.

Contact Information

Eric A. Seeger
Principal
Altman Weil, Inc.
eseeger@altmanweil.com  

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