Volume of mergers dips as larger deals slow

There were 20 new law firm combinations announced in the United States in the second quarter of 2019, according to Altman Weil’s MergerLine, falling slightly below reported numbers at the same time in previous years. In total, 47 deals were announced by mid-year.

So far in 2019, the volume of combinations has declined 10 percent since this time last year due to a slowdown in larger deals, https://files.constantcontact.com/cb194b59701/a7e4c9bb-7d0a-464a-b88c-f8d2314ab6a6.pdf An average of five acquisitions of firms with 20 or more lawyers was present during each quarter in 2017 and 2018. But in the first six months of 2019, there have been just three mid-sized and large combinations.

“It may seem counter-intuitive, but we’re actually seeing increased interest in large deals behind the scenes,” Altman Weil principal Tom Clay said in a statement. “However, the larger and more complex a combination is, the more slowly it is likely to progress and that can cause a temporary dip in the deal flow.”

The largest combination of the quarter was a rare merger of equals, the report noted. Seattle-based law firms Foster Pepper and Garvey Schubert, each with less than 100 lawyers, announced a merger to form Foster Garvey, a new Pacific Northwest regional firm.

Three international acquisitions were also announced in the second quarter of 2019. Among those, the 2,000-lawyer, New York-based international firm Greenberg Traurig acquired 39-lawyer Santa Maria Studio Legale in Milan, establishing the firm’s first Italian office. Additionally, mega-firm Dentons is set to add 21-lawyer MawereSibanda in Harare, Zimbabwe, and 13-lawyer Fisher Jeffries in Adelaide, Australia.

Half of the acquisitions in the second quarter occurred among small firms in the Southern region of the country, with only 10 percent of total acquisitions taking place in the Midwest. The largest Southern acquisition was made by AmLaw 200 firm GrayRobinson, which added to its Florida footprint with Thompson Sizemore, a nine-lawyer labor and employment boutique firm in Tampa.

The average acquired firm size settled at 11 lawyers across 20 acquired firms. The average acquirer size reached roughly 1,150 lawyers.

No Indiana-based law office participated in any merger in 2018 or in the first quarter of 2019. Since 2017, the movement of combinations involving Hoosier firms reported by Altman Weil’s MergerLine has slowed to a crawl.