Law Firm Mergers Continue Upward Trend in the First Half of 2012, Says Hildebrandt Institute MergerWatch Report
WASHINGTON, D.C., July 3, 2012 - Law firm mergers in the first half of 2012 were up compared with the same period last year, according to the latest Hildebrandt Institute MergerWatch Report. The Hildebrandt Institute tracked five completed mergers that involved U.S. firms in the second quarter of the year. This brings the total for the first half of 2012 to 25, higher than the 22 mergers in the first half of 2011 and 14 in the first half of 2010. This year's level of activity is closer to that of the years immediately prior to the recession which saw 42 mergers in 1H 2009 and 36 in 1H 2008.
Overall, firms still appear to be somewhat cautious. As we noted in our first quarter Peer Monitor Index, the current environment is difficult for firms, with weak demand and rates, and rising expenses, and that may require firms to re-evaluate their strategies for success.However, in keeping with a trend noted in the first quarter of the year, some firms are taking advantage of opportunities to strengthen their presence in local markets. In particular, large firms are continuing to make strategic acquisitions, often to solidify an existing footprint. The five U.S. combinations in the second quarter of this year were: Frost Brown Todd with seven-lawyer MGLAW in Nashville; Buchanan Ingersoll & Rooney with seven-lawyer Manion McDonough & Lucas in Pittsburgh; Detroit's Clark Hill with Kupelian, Ormond & Magy, a nine-lawyer Southfield, Michigan firm; Balch & Bingham with seven-lawyer Presley Burton & Collier in Birmingham; and Tampa's Fowler White Boggs with 11-lawyer Atkinson, Diner, Stone, Mankuta & Ploucha in Ft. Lauderdale.
Outside the U.S., there were 20 completed mergers in the second quarter, compared with 15 mergers in the second quarter of 2011 and nine mergers in second quarter 2010. For the first half of 2012, there were a total of 40 mergers.
Law firm consolidation in the U.K. is setting a brisk pace, with a number of combinations, particularly between firms in Scotland and England. May 1 saw the merger of England's Pinsent Masons and Edinburgh law firm McGrigors, resulting in a firm of over 1,500 lawyers. In addition, several notable tie-ups have just been completed or are due to be completed shortly, including between Anderson Fyfe in Glasgow and TLT in Bristol (July 1); Glasgow's Biggart Baillie and DWF in Manchester (July 1); and DAC Beachcroft and Glasgow's Andersons Solicitors (Sep 3); and Archibald Campbell & Harley in Edinburgh and Shoosmiths in England (fall 2012)
As Asia's importance to the global economy continues to grow, the legal market in that region is undergoing great change as well. The Pacific Rim remains a desirable location for law firms and notably, U.K. firms continue to show strong interest in the Australian market. Herbert Smith and Australia's Freehills are the latest firms to announce a tie-up. The firms have agreed to merge to create a new firm, Herbert Smith Freehills with 2,800 lawyers, effective October 1, 2012.
MergerWatch collects data from published reports, press releases and direct reports from law firms. U.S. mergers are reported where the acquired firm has five or more lawyers. Upon routine verification of the data, some historical numbers have been updated since previously issued reports, and the number of mergers contained herein may change as additional mergers are announced.
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