1st Quarter Law Firm Mergers Lowest in a Decade, Altman Weil Says
In the latest sign that the structure of the legal profession may be undergoing a sea change, a consultant reports that law firm mergers during the first quarter of 2010 were occurring at the slowest pace in at least a decade.
There were only eight such alliances between January and March, all involving the acquisition of law firms with no more than 50 attorneys, according to Altman Weil. But the legal consultant’s principal Thomas Clay, who oversaw the merger survey, says he expects activity to pick up somewhat as the year continues, reports the Philadelphia Inquirer.
Appropriately, given the state of the economy, law firms “were hugely resistant to taking any risks last year,” Clay says, pointing out that it takes about a year to get a merger off the ground. “You can’t go to your partners and say we are not going to hire any associates this year, but ‘Oh by the way, there is this really attractive merger we would like to do.’ “
However, “it will take some time for law firms to shift gears from the internal crisis management focus of 2009 back to an outwardly facing, strategic stance,” Clay tells the Philadelphia Business Journal. “There will be a ramp-up period in the next few quarters before we see the pace of deal-making increase significantly.”
Last year, there were 53 law firm mergers, representing a 24 percent drop from 2008.
The biggest merger of the first quarter was the acquisition of Pepe & Hazard, a 45-lawyer firm based in Hartford, Conn., by McElroy Deutsch, a 245-lawyer firm based in Morristown, N.J.
