The US Experience:
After a record-breaking year in 2019, US law firm merger and acquisition activity dropped 43% from a high of 115 combinations in 2019 to 65 in 2020, according to Altman Weil MergerLine. Deal flow fell off sharply in March as firms reacted to the COVID-19 crisis, but began to rebuild in the second half of the year.
“Most law firms set aside strategic growth plans in the first half of the year,” says Altman Weil principal and merger advisor Tom Clay. “But as their financial positions have stabilized, firms have begun to re-engage. We don’t expect to return to 2019 levels immediately, but we see a pent-up appetite for growth that should drive deal volume up in 2021.”
The largest deal of the year, announced in January before the pandemic took hold, was the merger of 650-lawyer, Atlanta-based Troutman Sanders and 450-lawyer, Philadelphia-based Pepper Hamilton, forming a new 1,000+ lawyer firm when the combination was finalized in July. It was the only deal in 2020 involving two firms both with over 100 lawyers.
Between August and December, global law firm Dentons announced four acquisitions including three planned moves to expand in US markets: in Utah with 96-lawyer Durham Jones & Pinegar in Salt Lake City; in Alabama with 86-lawyer Sirote & Permutt in Birmingham; and in Iowa with 78-lawyer Davis Brown in Des Moines. In a fourth deal, Dentons will add 18-lawyer East African Law Chambers in Dar es Salaam, Tanzania.
AmLaw 100 law firm, Littler Mendelson acquired three European law firms in 2020, including 39-lawyer Abdon Pedrajas in Spain, 20-lawyer Paruch Chrusciel Schiffter in Poland and 3-lawyer Gerlach Rechtsanwalte in Austria. Each of the acquired firms was a labor & employment boutique.
In another sizeable pre-pandemic combination, 800-lawyer, Philadelphia-based Duane Morris acquired 65-lawyer Satterlee Stephens in New York City.
Two California acquisitions rounded out the top deals of the year. Mountain West law firm Fennemore Craig acquired 46-lawyer, Fresno-based Dowling Aaron adding four California offices and giving Fennemore a presence in that state for the first time. In December, Philadelphia-based, AmLaw 100 firm Fox Rothschild announced their intention to combine with 21-lawyer Greene Radovsky in San Francisco expanding their California footprint.
The complete list of law firm mergers and acquisitions announced in 2020 as well as reports and analysis of the law firm merger market since 2007 are available online at www.altmanweil.com/MergerLine.