On their face, the numbers might indicate otherwise, but law firm merger activity has slowed, according to Thomas Clay, a principal at the legal consulting firm Altman Weil whose practice focuses on, among other things, law firm mergers and acquisitions. Clay says a “bulk” of the merger deals announced in 2009 were in the pipeline near the end of 2008.
According to Altman Weil, there were 24 law firm mergers and acquisitions in the first quarter of 2009. Last year there were 70 law firm mergers total -- with 18 occurring in the first quarter.
Clay says the numbers, however, are a bit misleading.
“A lot of these deals were conceptualized last year,” Clay says.
In 2009, there were 14 deals announced in January, three in February, and seven in March.
Four Am Law 100 firms have been involved in mergers and acquisitions so far this year. In January, 750-lawyer Seyfarth Shaw acquired 8-lawyer Paparelli & Partners; 2,500-lawyer Jones Day acquired 20-lawyer De Ovando y Martinez del Campo; and 1,750-lawyer K&L Gates merged with 250-lawyer Bell Boyd & Lloyd. In March, 900-lawyer McGuire Woods acquired 36-lawyer Grundberg Mocatta Rakison. With the exception of the K&L Gates merger and the McGuire Woods acquisition, all of the deal activity in 2009 involved a firm with 25 or fewer lawyers.
Clay says that law firms mergers have slowed since last fall when the economy took a downturn -- but adds the deals have not come to a “dead halt.” He says Altman Weil is helping with at least three potential mergers. Clay declined to name any of the firms involved, but says the mergers would be “pretty substantial.”
Clay says law firm merger deal flow, overall, in 2009 is “likely to be slower than last year,” and when it will pick up again “depends on how quickly things turn around in the economy.”