Legal analysts remain optimistic about a bounce-back in law firm merger activity after the pandemic slowed combinations last year.
Two new reports on law firm mergers in the first quarter of 2021 suggest there is "tremendous interest" in growth among firms of all shapes and sizes, and that the year after COVID-19 halted life in the United States could look more like the years before.
"We continue to see tremendous interest among law firms in growth, including through merger, as disruptive change within the legal industry creates ongoing pressure for firms to build greater depth and scale," the report stated, adding later: "We anticipate an uptick in active discussions in the coming months and a return to higher levels of completed mergers by the end of 2021 or early 2022."
Lisa Smith, a principal at Fairfax who worked on the report, said in an interview that she expects the number of completed mergers in 2021 will “certainly” beat the 2020 numbers, but may not quite reach the same levels as 2016 through 2019. Fairfax counted 41 mergers last year, while the average for recent years, pre-pandemic, was between 60 and 65, she said Tuesday.
As far as the types of firms considering mergers right now, Smith said it’s “all over the map”—figuratively in terms of size, and literally in terms of geography. And, Smith noted, the pandemic has changed the merger calculus for some.
"We’re seeing an awful lot of firms looking at growth via merger that may not have considered it before," she said Tuesday.