January 4, 2012 4:35 PM
Report: Law Firm Merger Boom to Continue in 2012
Posted by Brian Baxter
A new study by law firm consultancy The Hildebrandt Institute finds that law firm merger activity increased 65 percent between 2010 and 2011, and predicts more tie-ups to come in 2012.
The largest merger to be completed by U.S.–based firms last year, according to Hildebrandt, was Kilpatrick Stockton joining forces with Townsend and Townsend and Crew a year ago; the tie-up that united Edwards Angell Palmer & Dodge’s and Wildman, Harrold, Allen & Dixon ran a close second. (Hildebrandt's tally counts mergers that have been completed in 2011 and excludes those that have only been announced.)
Hildebrandt notes that the number of mergers finalized in 2011's fourth quarter rose to 14—a 55 percent increase over the nine that took effect in the third quarter. All told, according to Hildebrandt, there were 45 mergers involving U.S. firms last year, a 65 percent jump over the 27 completed in 2010.
Hildebrandt reports that the uptick in tie-ups—many of which were regional in scope, rather than national or international—suggests "merger activity appears to be heading back towards prerecessionary levels" that averaged about 55 mergers a year.
The Hildebrandt Institute has firsthand experience with mergers. The firm remains a unit of Thomson Reuters, which merged it with tech consultancy Baker Robbins & Company two years ago. That pairing broke up this summer when Thomson Reuters shed its Hildebrandt Baker Robbins consulting arm, according to our previous reports.
In geographic terms, the most active areas on the merger front for U.S. firms last year were Los Angeles (six mergers), Texas (five, with four of those centered in Houston), Illinois (four), and Florida and New Jersey (three apiece), according to Hildebrandt.
Among the newly merged firms getting Hildebrandt's 2012 tally started by officially going live this week—in some instances, with the help of Hildebrandt alums—are Bingham Greenebaum Doll, Faegre Baker Daniels, Ice Miller, and Norton Rose Canada.
Another tie-up likely to find its way into the 2012 merger count is Moore & Van Allen's acquisition of Hagood & Kerr, a nine-lawyer firm based in the affluent Charleston, South Carolina, suburb of Mount Pleasant. The two firms announced on December 28 that they would combine in January in a move that will add four partners and five associates to Moore & Van Allen's current 30-lawyer Charleston office.
Ben Hagood, Jr., a founding member of Hagood & Kerr, is a former South Carolina state legislator who specializes in government affairs work. Charlotte-based Moore & Van Allen had been looking to expand its presence in that area, according to a press release issued by the firm, which states it was the first North Carolina firm to establish a significant presence in Charleston by opening an office there in 1997. The arrival of the Hagood & Kerr lawyers will also give Moore & Van Allen additional bankruptcy, labor and employment, and transactional expertise.
According to the most recent Am Law 200 financial rankings, Moore & Van Allen saw its gross revenue increase 2.2 percent to $164.5 million in 2010, while profits per partner rose roughly 8 percent to $870,000. Revenue per lawyer was $585,000. The move south by Moore & Van Allen, which employs ESPN college basketball analyst Jay Bilas as of counsel, is the latest in a flurry of law firm moves in the Charleston market.
In December, Am Law 100 firm K&L Gates announced the that it was opening a Charleston office with the hiring of seven partners from the local operations of North Carolina firm Parker Poe Adams & Bernstein. Earlier this year, North Carolina–based Am Law 200 firm Womble Carlyle Sandridge & Rice picked up 44-lawyer Charleston firm Buist Moore Smythe McGee. Another large North Carolina firm, Smith Moore Leatherwood, opened a Charleston office in April and snatched an attorney from Moore & Van Allen this week.
The apparent growth of the Charleston legal market contrasts with the contraction the industry is seeing in other regions (Charlotte, for instance). One development drawing law firms to the Palmetto State city is the planned widening of the Panama Canal, which should increase the flow of commerce through the Port of Charleston, the fourth-busiest container port in the nation. South Carolina has also become an attractive destination for companies such as Boeing and BMW that have relocated U.S. manufacturing operations to the Palmetto State in recent years because of tax breaks and a predominantly nonunion workforce.
Not that South Carolina is the only place law firms are looking to expand. The international arena has also seen its share of merger activity, according to Hildebrandt, which notes that Asia, Australia, Canada, and the United Kingdom all saw major law firm combinations over the past year.
China's King & Wood and Australia's Mallesons Stephen Jaques confirmed their ambitious merger plans in December, and this week McDermott Will & Emery announced its expansion into Istanbul by inking an alliance with Turkish firm Fora & Sanli. The American Lawyer's current Focus Europe supplement includes a feature story about the way in which Turkey's thriving economy has made it a hot destination for international law firms.Make a comment