da6aaa5156614abd8e79eb91ef37cf0872U.S. law firms are holding off on tying the knot with other firms — a trend illustrated by a drop in merger and acquisition activity during the second quarter of 2009 compared to previous second quarters, according to a legal industry survey.
Consultant firm Hildebrandt International said Wednesday that nine law firm combinations were completed from April to June, down from the 14 deals in the same period in 2007 and 2008.
However, the first half of this year saw a total of 42 completed mergers, which is still ahead of last year. In addition, one merger has been announced and will be wrapped up in the third quarter, according to Hildebrandt.
“While interest in mergers remains high, the slower activity in the second quarter reflects overall caution on the part of firms, as well as a focus on the abundance of lateral partner opportunities,” said Linda Smith, head of Hildebrandt’s law firm strategy and merger practice.
The biggest U.S. merger and only cross-border union with a U.S. firm in the second quarter involved McGuireWoods LLP, a Richmond, Va.-based firm with 900 lawyers, and London-based Grundberg Mocatta Rakison LLP, with 36 lawyers.
The runner-up combination was that of Schuyler Roche PC, a full-service firm based in Chicago, and local trial and appellate boutique Crisham & Kubes Ltd. Schuyler picked up Crisham’s 10 lawyers to create a combined team of 50 lawyers.
Out of the total combinations in the second quarter, the average size of the smaller firm in each transaction was 14. Much like the first quarter, the majority of mergers and acquisitions in the second quarter took place between small firms. Hildebrandt noted that seven of the nine completed unions involved firms with between five and 10 attorneys.
From a global perspective, Hildebrandt said 18 mergers were completed between law firms outside the U.S. during the second quarter of 2009. Three of these were cross-border mergers, involving Belgium, Italy and the U.K.
The U.K. emerged as the most active market, with nine domestic unions and one cross-border deal. Italy notched two domestic mergers.
The legal consulting firm also tracked office openings spanning the globe. The second quarter of this year saw 42 office openings, of which 70 percent did not involve a combination with another firm.
Out of the 25 U.S. office openings, five offices set up shop in California, three in Florida, and two each in Kentucky, Pennsylvania and Wisconsin.
London, the United Arab Emirates and Saudi Arabia each saw two office openings, and Beijing, Hong Kong, Sydney and Taiwan each saw one.
In the first quarter of the year, Hildebrandt counted a total of 33 completed U.S. law firm unions from January to March, a significant increase from 22 completed mergers in the first quarter of 2008 and 23 in the first quarter of 2007.
Hildebrandt reported that 23 of the 33 mergers involved firms with five to 20 lawyers.109189002009/08/01 00:00Law Firms Less Inclined To Join Forces: SurveyWednesday, Jul 01, 20092009/07/012009/07/01742009/07/011U.S. law firms are holding off on tying the knot with other firms — a trend illustrated by a drop in merger and acquisition activity during the second quarter of 2009 compared to previous second quarters, according to a legal industry survey.