A record year for law firms' M&A activity
Law firm mergers and acquisitions reached a record number last year as firms sought to overcome static growth in corporate legal spending by grabbing market share.
Law firm mergers and acquisitions reached a record number last year as firms sought to overcome static growth in corporate legal spending by grabbing market share.
Nationwide, there were 91 such mergers, three more than in 2014, according to Newtown Square-based legal consultant firm Altman Weil.
Among Philadelphia firms that acquired smaller law firms in the United States and abroad were Morgan Lewis, Fox Rothschild, Cozen O'Connor, and Blank Rome.
"Law firm mergers and acquisitions are a primary strategy to acquire new business in a market where demand is flat or constrained," said Altman Weil principal Ward Bower. "The record number of deals in 2015 is a reflection of the intense competition among law firms for new work, and we expect the market to remain hot in 2016."
Such acquisitions rarely involve an exchange of cash. The payoff for the acquired firm is the broader financial security and more extensive business platform provided by a larger law firm. The acquiring firm gets to deepen practice areas where it may be weak, while taking on new partners and the business they bring with them.
By far the most active firm in 2015 was Dentons, which announced what Altman Weil described as an unprecedented eight combinations in the U.S. and abroad, including the 300-lawyer U.S.-based firm McKenna Long & Aldridge. Altman Weil said that when all of Dentons' 2015 deals are finalized, the firm will have 7,400 lawyers worldwide.
Among Philadelphia-based firms, mergers ranged from Fox Rothschild's acquisition of 82-lawyer Oppenheimer Wolff & Donnelly of Minneapolis to the acquisition by Center City's Cohen Seglias of a four-lawyer firm in Washington, Thaler Liebeler.
Jason Copley, managing partner of Cohen Seglias, said the acquisition of Thaler Liebeler enhanced the firm's extensive commercial and federal government construction practice as well as its focus on internal investigations.
"Our existing work includes clients up and down the East Coast and those clients, obviously - to the extent that they are working in the area - that [Washington] presence helps build our profile," Copley said.
Cozen O'Connor acquired 60-lawyer Meckler Bulger & Tilson of Chicago in June, expanding its presence there and deepening its labor, employment, and white-collar defense practices. Overall, the merger boosted the number of lawyers at Cozen to more than 600.
Fox Rothschild's acquisition of Oppenheimer Wolff gave the firm a foothold in the upper Midwest while deepening its commercial and health-care litigation, along with financial services, real estate, and other practices. The firm has been on a steady growth trajectory in recent years, even during the downturn in the legal market in 2008 and 2009, and now has more than 700 lawyers.
Other mergers involving Philadelphia-area firms included Blank Rome's acquisition of the 24-lawyer firm of Wong Cabello of Houston. That combination increased Blank Rome's lawyer head count to about 550.
Meanwhile, Center City's Morgan Lewis announced a merger with Singapore-based Stamford Law Corp., a deal that brought 80 lawyers to Morgan. Morgan Lewis now has about 1,900 lawyers.
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