Law firms have benefitted from a 77 per cent hike in expenditure to external legal advisers by organisations involved in M&A activity. Some 37 per cent of the legal work was commissioned from law firms with between 501 and 750 lawyers, according to the ELM Trends Report titled ‘Growth in M&A Billings Benefits ’Second Largest’ Law Firms’. Kris Satkunas, director of strategic consulting at CounselLink, a leading provider of ELM software, said: ‘General counsel are assigning more M&A matters – especially those with total fees in excess of $1 million – to the "Second Largest" group of firms with 501-750 lawyers.’

Consolidation

The research also found that billing rates for M&A matters had dropped, form a high of $412 per hour in 2011 to $375 in 2013. The report said that two underlying factors drove the reduction in hourly rates. Firstly, it said, second tier firms tend to have lower billing rates than the largest law firms, and secondly, the trend of consolidating the nuber of law firms employed is continuing. It pointed out that 54 per cent of corporate legal departments had consolidated at least 80 per cent of their outside counsel spend iwht 10 or fewer law firms. Manufacturing and financial companies had the highest percentages of law firm consolidation.Source: Digital Journal