According to Hildebrandt International legal industry consultants, law firm merger activity is keeping pace with last year.
There were 13 completed law firm mergers and acquisitions involving US law firms in the third quarter, bringing the total for the year to 49. This compares to 47 mergers completed in the first three quarters of 2007.
The largest US merger in the third quarter was Orrick, Herrington & Sutcliffe’s combination with Holters & Elsing in Dusseldorf, Germany. The second largest merger was between K&L Gates and Kennedy Covington Lobdell & Hickman in Charlotte, NC. The average size of the smaller firm in all 13 combinations was higher than in the prior year, with the average size of the firms acquired in the first three quarters of 2008 at 45, compared to 39 for the first three quarters of 2007
Domestically, the southeastern US was the top destination for mergers in the third quarter of 2008, with five mergers in Atlanta, Memphis, Mobile (AL), Charlotte (NC) and Greenville (SC). There were also two Midwest mergers: one in Cleveland and one in Chicago. The Orrick merger in Germany was the only cross-border merger.
Globally, there were a total of 80 completed international mergers, of which 18 were cross-border, through the third quarter. Twenty-two of these occurred in the third quarter. UK firms completed six mergers in the third quarter. Next were Australia, Canada, and Ireland, with two mergers each. Including the cross-border merger involving a US-based law firm, there were a total of five cross-border mergers completed in the quarter.
According to Lisa Smith, head of Hildebrandt’s Law Firm Strategy practice, “We expect mergers in 2008 to be close to 2007 levels. The current economic downturn will intensify the need for firms to offer competitive, differentiated services to clients and many firms recognize that mergers are one way to implement their strategies. However we do not expect to see an uptick in white knight mergers, where troubled firms seek merger as a last resort, as few firms are willing to take on this risk.”
In addition to tracking mergers and acquisitions among law firms, Hildebrandt International also tracks office openings around the globe.
In the third quarter of 2008, they tracked 60 new branch office openings; 25 of which were in the US, and 35 were outside the US.
The Middle East and Asia continue to be attractive locations, with ten openings each. In the US, the top area was California, with four office openings in San Francisco/Silicon Valley and two in Los Angeles, followed by New York, with four openings in New York City and upstate, and Texas, with a total of three office openings.
