Merger mania continues as 22% of firms report tie-ups
PUBLISHED July 4, 2012
Wednesday 04 July 2012 by Catherine Baksi
Merger activity has remained strong among small and medium-sized firms, with nearly a quarter completing a merger in the past six months, research has revealed.
The fifth in a series of six-monthly surveys of 50 law firms has shown that 22% had completed a merger in the past six months and 80% had considered the possibility, slightly down on the 86% reported six months ago. A third of respondents considered there was a good chance of a merger in the coming year or that one was almost definite.
Once again the survey showed a different view depending on size of firm. In firms with more than 10 partners, 62% considered there was either a good chance of a merger or that one was almost definite.
By contrast 27% of the firms with fewer than 10 partners rated the possibility of a merger that high.
There was a 10% increase in the number of approaches made or received, with each firm speaking to on average 1.2 other firms. This compares with each firm speaking to just 0.7 other firms in the six months to December 2009.
The survey, undertaken by Andrew Otterburn on behalf of the Law Consultancy Network, was based on questionnaires from 50 firms, the median size being 10 partners or members. Otterburn said: 'The survey indicates continuing strong merger activity, which is our experience amongst our clients. There is still much activity and discussions however there are only so many good firms out there.'
He advised: 'If merger is on your agenda and you have identified possible firms start talking to them - before someone else does.'
Meanwhile, on the other side of the Atlantic, a report by a US legal consultant shows that the number of law firm mergers and acquisitions announced in the US dipped in the second quarter of 2012, from 15 to 11. This follows six strong quarters of deal flow that averaged 15 mergers per quarter between October 2010 and March 2012.
Altman Weil MergerLine put the change down the demise of New York-based international firm Dewey LeBoeuf, which filed for bankruptcy earlier this year.
Altman Weil principal Ward Bower said: 'The demise of Dewey LeBoeuf this spring put over 1,000 lawyers and hundreds of millions of dollars of business into play, shifting the short-term focus of many law firms to those opportunities.'