A handful of law firms grew by eye-popping numbers between 2017 and 2018, with 10 large firms increasing their U.S. head count by 15% or more, according to the newly released Law360 400. Of the five large firms that grew their attorney ranks the most last year, four did so through a merger.
The number of law firm mergers and acquisitions in recent years has snowballed, according to a tally maintained by legal consulting firm Altman Weil, with the industry experiencing a record number of tie-ups in 2013, then again in 2015, 2017 and last year, besting itself year after year and demonstrating a ravenous desire among firms for fast growth.
But some of that eagerness to combine and grow head count at a rapid pace may be misplaced, law firm management consultants said.
While combinations do make sense for some firms in the current healthy market where demand is high, others may be entering into risky and complex transactions for the wrong reasons and may suffer financially as a result, experts said.
The Upside of Sizing Up
There are advantages to being big in today’s corporate legal market, not the least of which is being able to charge higher rates, some experts say.
“That can be useful up to a point,” said Jon Lindsey of legal search firm Major Lindsey & Africa. “Bigger solely for the sake of being bigger is not necessarily a winning strategy, but there can be advantages to having greater bench strength and depth in particular practice areas.”
Leaders of law firms that grew significantly via merger in 2018 contend they did not merge simply for the sake of growing larger.