A record 115 US law firm M&A deals were forged last year, according to research compiled by Altman Weil MergerLine. The tally represents a 8.5% increase on last year’s roster of 106 deals, the previous high-water mark for transactions, which the consultancy Altman Weil has been tracking since 2007.
However, small deals involving the acquisition of firms with up to 20 lawyers dominated, accounting for 88% of all combinations. Overall, the average size of acquired firms in 2019 was 18 lawyers – down 33% from the prior year.
Altman Weil principal and merger advisor Tom Clay said: “Law firms' appetite for small, quality acquisitions seems bottomless – constrained only by the available inventory. We know many firms also are considering sizeable combinations, but because those deals are more complex, they are slower to come together and can be more easily derailed."
Just six 2019 deals involved merger targets with more than 100 lawyers, with global giant Dentons accounting for three, its tie ups with 178-lawyer Indianapolis firm Bingham Greenebaum, Pittsburgh’s Cohen & Grigsby (144 lawyers) and New Zealand’s Kensington Swan, which boasted 113 lawyers at the time the deal was announced in July last year.
The deal between AMLaw 100 rivals Faegre Baker Daniels and Drinker Biddle & Reath – which was announced last month - was the largest transaction of the year, with two midwestern combinations completing the tally of large transactions: Kansas-based Lathrop & Gage’s merger with Minneapolis rival Gray Plant Mooty to form Lathrop GPM and Indianapolis-based Taft Stetinnius’ acquisition of Minneapolis firm Briggs and Morgan.
Deals involving Dentons peppered the year as it continued an acquisition spree that has seen it become the world’s largest law firm by headcount.
Altman Weil MergerLine compiles news of mergers and acquisitions involving at least one US law firm and includes vereins with a US partnership component.