In an article published today, The American Lawyer discusses a trend that we are also observing. Many firms are considering mergers rather than simply bringing on laterals by ones-and-twos. Dylan Jackson writes:
"Consultants are portending a flurry of law firm mergers in 2022, especially among larger firms, as the tight lateral market shows no signs of abating and the elite pull further away from the rest of the pack.
Many firms are currently in merger talks, consultants told Law.com. The interest is driven by a few factors. For one, the incredibly competitive lateral market has significantly reduced the opportunities most firms have for acquiring talent, and many don’t expect that to ease up anytime soon—especially early next year after attorneys are paid out their end-of-year bonuses."
This corresponds to our observations, and to the conversations we are having with managing partners around the country. Corporations are consolidating coming through the pandemic, and are wanting to consolidate their legal spend as well. Quality regional firms that have always served the best companies in their area are finding it harder and harder to compete in keeping that work and hanging on to their associates and young partners. Elite firms are opening in secondary markets, or snatching up attorneys to work remotely.
As a firm looks to the two, five, or ten year horizon, will they be able to grow to meet their clients' needs by simply adding laterals? Are they comfortable to stay the same size while their competitors are growing by acquiring smaller firms or merging with larger national firms? These are the types of questions firms are asking.
Law firm mergers are difficult and complex, and they aren't for everyone. They are an art and a science. In our over two decades of working with firms, our professionals have consulted firms in every stage of the process. If you'd like to set up a completely confidential and free consultation, please reach out to us. We would love to speak with you.