Tag Archives: MergerWatch

U.S. Mergers, Job Growth Up for Q1 2013

Posted on April 9, 2013 by | Leave a comment

Thanks to the highest number of U.S. mergers announced in a quarter in six years and the largest single-month gain in legal sector jobs in a year, 2013 began with a bang.

According to Altman Weil’s MergerLine, there were 21 U.S. law firm mergers announced in the first quarter—the highest number of mergers announced in a quarter since Q1 2009. Of those, 16 combinations were finalized in Q1. There also were seven firms that finalized mergers announced earlier, for a total of 23 mergers or acquisitions effective by March 31.

The majority of mergers—24 of the announced or finalized combinations—were targeted acquisitions of smaller, specialty firms with fewer than 25 lawyers. Only four combinations—Clark Hill with 82-lawyer Thorp Reed & Armstrong, Dickinson Wright with 60-lawyer Mariscal Weeks McIntyre & Friedlander, Novak Druce with 49-lawyer Connolly Bove and K&L Gates with 300-lawyer Middletons—involved merging with larger firms.

“Firms are picking up specialty practices, expanding in strong markets and adding offices in new cities,” said Ward Bower, a principal at Altman Weil. (You can read the full Q1 2013 report here.)

The high number of mergers seems to be good for job growth. According to the U.S. Department of Labor’s preliminary data, March saw a gain of 2,000 legal sector jobs—the largest gain seen in a year and the first addition of jobs since the beginning of 2013.

In fact, as compared to March of last year, there are 9,000 more people employed in the legal industry. Yet, as the ABA Journal points out, the total number of legal sector jobs—1,126,900 as of March 2013—has yet to rebound from the prerecession peak of 1.18 million.

→ Leave a comment

Posted in Market Trends

Tagged , , , , , ,

National, International Mergers Continue

Posted on January 3, 2013 by | Leave a comment

The mergers just keep coming. With the finalization of national and international mergers, the trend of quickly growing firms through law firm acquisitions continues.

AmLaw Daily reports the acquisition of Phoenix law firm Mariscal Weeks McIntyre & Friedlander by Detroit-based Dickinson Wright. The merger took effect Jan. 1. It increases Dickinson Wright’s foothold in the Phoenix market by 60 lawyers, giving the firm more than 350 lawyers in the U.S. and Canada who cover more than 40 practice areas.

Also effective Jan. 1, Houston’s Powers & Front LLP merged with national firm Wilson Elser Moskowitz Edelman & Dicker LLP. This adds eight lawyers to Wilson Elser’s Houston office, bringing the total number of lawyers in that office to 20. According to the Houston Business Journal, legal experts expect that mergers and acquisitions by law firms who want a foothold in the Houston law firm market will be on the rise in 2013.

On the international side of things, U.S.-based K&L Gates LLP merged with Australian firm Middletons on Jan. 1. This makes K&L the “largest U.S.-based firm in the Asia-Pacific region” and increases the firm’s Asian presence from seven offices to 11. It also gives K&L Gates a foothold in the Australian market with the addition of Middletons’ four offices. The increase of 400 lawyers in Asia and 300 in Australia brings K&L Gates’ total to more than 2,000 attorneys around the world.

According a Wall Street Journal article, “past expansions by U.S. and U.K. law firms largely targeted world financial centers such as London or Hong Kong.” The current trend in international and national mergers, however, seems to be aimed at putting “lawyers on the ground wherever clients are doing business.”

Getting lawyers on the ground is only part of the puzzle, however, as evidenced by U.S.-based Edwards Wildmans’ 2006 expansion into Hong Kong. Until the beginning of this year, the firm “operated through an association with Lister Lo Lui & Choy” and not under its own brand. This changed at the beginning of the year as the Hong Kong Law Society approved the firm’s full integration and the Hong Kong office changed its name to Edwards Wildman Palmer.

→ Leave a comment

Posted in Insights, Market Trends

Tagged , , , , , ,

Mega-Mergers Transform the Canadian Legal Market

Posted on December 6, 2012 by | Leave a comment

In a market that some might have described a few years ago as less than vibrant and rather confined within the country’s borders, * the Canadian legal market could now more accurately be described as “red-hot.”

Similar to the recent transformation of the Australian legal market, Canada has recently undergone a wave of mergers involving international law firms that has dramatically changed the upper tier of the country’s legal landscape.  The largest firms, ranging from approximately 600 to 800 lawyers, such as Gowlings and McCarthy Tétrault, are now competing against global giants, four to five times their size, with major operations in Canada as well as global networks that can provide a significant competitive advantage.

Cross-Border Mergers

Marking the beginning of this new wave of mega-mergers, Norton Rose Group combined with Ogilvy Renault and South African law firm Deneys Reitz, in a three-way arrangement in June 2011.

Six months later, in January 2012, Norton Rose added Calgary-based Macleod Dixon to the Group, building additional depth in the firm’s mining and energy practices.  The move created a firm with more than 2,900 lawyers around the globe, 700 of which are part of the firm’s Canadian operation known as Norton Rose Canada LLP, and ranking it as one of the largest legal practices in Canada.  In addition to Macleod’s lawyers based in Canada, the merger also gave Norton Rose** a significant presence in Latin America (60 lawyers in Venezuela and Colombia), a 13-lawyer office in Almaty (Kazakhstan) and a team of lawyers in Moscow.

The most recent combination shaking up Canada’s legal industry is that among US & UK-based SNR Denton and Canada’s top-ranked Fraser Milner Casgrain (FMC) as well as Paris-based Salans.  The three-way SNR Denton/Salans/FMC combination will rank the firm as one of the largest law firms in the world with more than 2,500 lawyers. Rebranded as Dentons, the combination is expected to go live in the first quarter of 2013.

FMC has no lawyers or offices outside of Canada, but has strong energy and mining practices – the firm has over 100 lawyers in its Calgary office.  The merger will enable the firm to have a greater global reach that will undoubtedly help FMC’s clients conducting business in major international markets. “It really is an opportunity for transformational change for our firm and we think frankly it’s a transformational step in the evolution of the Canadian legal profession,” Chris Pinnington, FMC’s chief executive officer, said in an interview with The Globe and Mail before the firms’ partners voted to approve the merger.

Canadian Law Firm Mergers Announced from 2008 to YTD 2012

By announcement date; Source: Thomson Reuters’ MergerWatch

By announcement date; Source: Thomson Reuters’ MergerWatch

 Smaller Cross-Border Deals

In a similar but smaller combination, Fasken Martineau, which already had a small outpost in South Africa, announced in October that it was merging next February with Johannesburg-based law firm Bell Dewar.  Primarily driven by its work for mining industry clients as they seek investment opportunities throughout the continent, the firm believes that the addition of the 76-lawyer Bell Dewar team gives Fasken Martineau the largest international footprint of any Canadian-based law firm.  The firm, which has offices across Canada, will have almost 800 lawyers in total,  approximately 170 outside its borders, including a substantial presence in London (the result of its 2007 merger with Stringer Saul) and an office in Paris.

And while work in the mining, infrastructure, energy and project finance sectors may be driving many of these deals, insurance work has also been a factor in some of the smaller cross-border mergers. For example, UK firm DAC Beachcroft, which is well-known for its insurance practice capability, and insurance specialist firm McCague Borlack (Toronto) agreed to a formal association this past May, a precursor to a full merger in 2014.

In 2011, another Canadian insurance firm, Nicholl Paskell-Mede (Montreal), joined forces with Clyde & Co, a UK-based global insurance and reinsurance practice powerhouse.

Domestic Mergers

Domestically, most of the mergers were small to moderate in size over the last five years. The largest merger was the combination last year between McMillan and Lang Michener, combining under the single name, McMillan, and creating a firm with close to 400 lawyers across Canada and with a presence in Hong Kong.

Other examples include Toronto’s Miller Thomson, which merged with Balfour Moss, a 24-lawyer firm in Saskatchewan 2010; Halifax-based McInnes Cooper, which acquired New Brunswick law firm Clark Drummie, also in 2010; and McCarthy Tétrault, which expanded its office in Calgary by absorbing Venn Law, a boutique energy firm, in 2011.

Posted by Marianne Purzycki

* Many of the top Canadian firms have had small offices in key international markets such as London and New York for some time, and more recently in China and the Middle East. Very few international firms have branch offices in Canada – Baker & McKenzie, Shearman & Sterling and Skadden Arps are among the handful. 

 ** In mid-November, Norton Rose announced yet another combination.  Confirming long-held rumors, the firm reported that it will combine with Houston-based Fulbright & Jaworski on June 1, 2013 to form 3,800-lawyer Norton Rose Fulbright.

→ Leave a comment

Posted in Insights

Tagged , , , , ,

The Return of the Mega-Merger

Posted on November 16, 2012 by | 1 Comment

In a year of otherwise rather modest merger activity, the U.S. legal industry has seen mega-mergers return with a vengeance this November.  Last Thursday, SNR Denton announced a planned merger with Canada-based Fraser Milner Casgrain and Paris-based Salans, which will result in one of the world’s ten largest firms by headcount.  Then on Wednesday, recent rumors were confirmed when Houston-based Fulbright & Jaworski announced its intention to combine with London-based Norton Rose to create a 3,800-lawyer firm with 55 offices worldwide.

These announcements mark a shift in international merger activity involving U.S. firms, which had gone relatively quiet following the wave of trans-Atlantic mergers (including the merger that created SNR Denton in 2010) a couple of years ago.  The market has recently focused more on small domestic acquisitions and more minor tie-ups.  However, the international nature of both mergers continues a larger trend towards cross-border combinations, seen most recently in the Australian market.  Marianne Purzycki noted two such mergers, one completed and one rumored, last month in the quarterly MergerWatch report:

Herbert Smith and Australia’s Freehills merged to create Herbert Smith Freehills with 2,800 lawyers, effective October 1.  Global law firm K&L Gates and Australian national law firm Middletons have acknowledged that they are in discussions regarding a possible combination that if approved, would create a firm of more than 2,000 lawyers.

The international nature of these tie-ups reflects the increasingly global business interests of large law firm clients.  Discussing the reasons behind the proposed three-way tie up with FMC and Salans, SNR Denton global chairman Joe Andrew told Legal Week:

“We are in more countries than most, yet we are in fewer regions; we are the largest law firm without a presence in Australia or Latin America, for example.  It is a chess game, not a race, to follow our clients into the sectors that matter.”

The strategy is not merely to have offices in all of the places where the firm’s clients do business, though certainly that offers value.  A truly global firm also offers unique expertise that better suits the international nature of business today.  Last month, we discussed how Freshfields became the top firm for M&A in 2012, advising on more announced deals than any other firm.  The focus was on cross-border transactions, which Freshfields pursued not only by having a global footprint, but also by emphasizing their specific expertise and developing working groups across international lines.  The SNR Denton/FMC/Salans combination seeks to create a law firm in this vein.

The combination of Norton Rose and Fulbright & Jaworski is more straightforward, though the focus is still on better serving clients with a presence in more global regions.  As the Wall Street Journal reports, the tie-up gives Fulbright an international reach to better serve its energy clients while Norton Rose gains a foothold in the U.S.

Do these mergers indicate that the U.S. legal industry is in for yet another round of mega-mergers?  With a possible combination of K&L Gates and Middletons on the horizon, it certainly seems that way.   Law firms are as hungry for global growth as ever, and the industry’s consolidation phase is not yet done.

Posted by Emily Fisher

→ 1 Comment

Posted in Market Trends

Tagged , , , , , , ,

International Mergers Up Sharply in Q3, Says Hildebrandt Institute MergerWatch Report

Posted on October 2, 2012 by | 1 Comment

Law firm mergers through the third quarter of 2012 were on par with the same period last year, according to the latest Hildebrandt Institute MergerWatch Report.  The Hildebrandt Institute tracked eight completed mergers that involved U.S. firms in the third quarter of the year.  This brings the total of mergers in the first three-quarters of the year to 33, higher than the 31 mergers completed in 2011 and the 20 mergers completed in 2010.  However, merger activity still lags behind 2009, which saw 49 completed mergers in the same time period.

While we are seeing a continuing trend of low to moderate merger activity in the U.S., merger activity outside the U.S. is quite robust, particularly in the UK and Australia, a trend observed since the beginning of the year.

U.S. Mergers

With the exception of the merger between personal injury law firm Jacoby & Meyers and Chicago-based Macey Bankruptcy Law in July, which created a 300-attorney firm, the combinations continue to be rather small in scope, an indication of a U.S. legal market that has little room for further segmentation at the top end.  Firms continue to make small acquisitions, either to expand their geographic footprint, build upon an existing regional presence or to create strength-in-depth, a trend that we are also observing in the Australian domestic market, described below.

Three of the domestic combinations involved firms located in New York:

  • ASK Financial based in St. Paul combined with Neiger LLP, a six-lawyer bankruptcy practice
  • Richmond, Virginia’s Murphy & McGonigle combined with Wall Street’s Krebsbach & Snyder
  • Former FBI Director Louis J. Freeh’s firm, Freeh Sporkin & Sullivan, joined with Philadelphia-based Pepper Hamilton

The remaining four domestic mergers took place in the West and South:

  • In Nevada, 23-lawyer firm Jones Vargas joined with Phoenix-based Fennemore Craig
  • Kansas City’s Spencer Fane Britt & Browne combined with Denver’s 21-lawyer Grimshaw & Harring, giving Spencer Fane a new office in the Mile High City
  • Sacramento’s Weintraub Genshlea Chediak Tobin & Tobin merged with Los Angeles entertainment law firm Weissmann Wolff Bergman Coleman Grodin
  • Kentucky’s Wyatt, Tarrant & Combs boosted its Memphis office with the addition of Williams McDaniel

Non-U.S. Mergers

In contrast to the domestic U.S. legal market, international merger activity was up sharply in the third quarter. The number of combinations involving two non-U.S.-based law firms in the third quarter was 21, more than double the nine mergers tracked in 2011. For the first three quarters of 2012, there were 61 mergers.  The number of combinations thus far in 2012 is almost two times greater than for the first three quarters of 2011, which saw 32 mergers, as well as for prior years, which saw 32 combinations in 2010 and 35 in 2009.

The brisk pace of law firm consolidation in the U.K. is ongoing, with a number of combinations completed this quarter including between Anderson Fyfe in Glasgow and TLT in Bristol (Jul 1); Glasgow’s Biggart Baillie and DWF in Manchester (Jul 1); and DAC Beachcroft and Glasgow’s Andersons Solicitors (Sep 3); and Shakespeares and Harvey Ingram (Sep 1).

Rapid change is also occurring in the Pacific Rim legal market.  The region remains a desirable location for law firms and notably, U.K. firms continue to show strong interest in the Australian market.  Herbert Smith and Australia’s Freehills merged to create Herbert Smith Freehills with 2,800 lawyers, effective October 1.  Global law firm K&L Gates and Australian national law firm Middletons have acknowledged that they are in discussions regarding a possible combination that if approved, would create a firm of more than 2,000 lawyers.  As we noted above, the Australian domestic market is also undergoing significant change as a number of middle market firms tie up to reposition themselves to compete more effectively for domestic work.  Sixteen domestic combinations have been announced since 2010, including seven so far this year, almost double that of 2011.

Posted by Marianne Purzycki

→ 1 Comment

Posted in Insights

Tagged , , ,