Given the sagging economy, both in the United States and abroad, as well as the defection of top partners to rival firms, many firms have decided to grow their practices by merging with other firms. Firms see this as a way to get a piece of the action in the multi-billion dollar international corporate law industry.
Merger activity was anemic in 2010, but it increased by approximately 60% in 2011. While most of the mergers were between smaller firms, i.e. 35 or fewer attorneys, there were a few notable mergers between large firms. Merger activity started in 2011 with a bang with arguably the largest merger of the year between Kilpatrick Stockton and Townsend and Townsend and Crew, now known as Kilpatrick Townsend & Stockton LLP, with eighteen offices both in the U.S. and abroad. Another large acquisition of note involved 500-strong Boston firm Edwards Angell Palmer & Dodge of Chicago’s 160-attorney firm Wildman Harrold Allen & Dixon.
There were three other large deals that were either announced or finalized in 2011. One was the merger first announced in the Summer of 2011, and finalized on January 1, 2012, of Indianapolis firm Ice Miller LLP with Columbus, Ohio firm Schottenstein Zox and Dunn Co., LPA. The combined firm, now known as Ice Miller LLP, has approximately 314 lawyers. Another deal involved the acquisition of the 67-lawyer Mississippi firm, Watkins Ludlam by Jones Walker, a 300-lawyer New Orleans firm. The third deal, also finalized on January 1, 2012 was the combination of Indianapolis-based Baker & Daniels LLP and Faegre & Benson LLP, the largest law firm in Minnesota and one of the 100 largest firms headquartered in the United States.
Oklahoma also saw acquisition activity. The largest firm in Oklahoma, McAfee & Taft, acquired boutique firm Eldridge Cooper Steichen & Leach while Oklahoma-based Crowe & Dunlevy merged with Day, Edwards, Propester & Christensen.
One of the main motivators of law firm mergers was expanding a firm’s presence into a new geographical area. Expansion into California was a key motivator for Pennsylvania-based Fox Rothschild, Kansas City-based Polsinelli Shugart, and Dallas-based McKool Smith which acquired the Los Angeles firm, Hennigan Dorman. 200-lawyer firm Roetzel & Andress, which has 13 offices throughout Ohio, Florida, and other cities, expanded its presence into Chicago when it added eight lawyers (including six partners) after acquiring the Chicago firm Lewis, Overbeck & Furman.
This trend is not slowing down any time soon as firms recognize the need to merge in order to survive these tough economic times. It will be interesting to see what law firm combinations will arise in 2012.