The Rise in Law Firm Mergers in the United States
One of the main trends in the 2023 Chambers USA Guide Launch was the increase in law firm mergers in the US legal market, learn more about this topic in this legal topics article.
The shape of the legal market
One thing that’s struck me this year is how much the shape of the legal industry itself has changed. Last year we were talking about explosive levels of lateral hiring and we’ll spend this year really diving into what impact that has had on clients.
“I’d recommend them with less passion than I would have done a few years ago. A lot of good lawyers have left and they don't have a very deep bench of younger partners. Our new lawyer, who's been a lateral hire, who doesn't know the company culture since he's new. They, as a firm, have really lost their luster.”
As this quote shows, the fairly fluid state of a lot of practice groups hasn’t gone quite as smoothly as some firms expected.
However, the main story so far for 2023 has been the incredible pace of law firm mergers. After a slower time in the immediate aftermath of the pandemic, this year has already seen really significant law firm mergers.
For firms like Holland & Knight, Orrick, Smith Gambrell, Maynard Cooper, and Clark Hill, and I think we all expect a few more really significant combinations in the near term.
As we enter these law firm mergers into our own database, what we’ve seen is that these law firms tend to be adding significant numbers of ranked lawyers and practitioners in new markets. Holland & Knight, for instance, gained a number of new ranked lawyers in Tennessee, Clark Hill in Pennsylvania, Maynard Cooper in South Carolina, and Smith Gambrell in Illinois. Orrick’s merger was slightly different, bolting on a highly rated financial services practice to their already highly rated DC office.
Recent years have seen a number of law firms expand geographically by opening new offices and building a team either via relocations and lateral hiring - even Cravath got in on the act last year, opening up a DC office - and we’ve usually seen, from other law firms, that it often takes a while to build a reputation and a local profile.
I’ll be particularly interested this year to compare what kind of impact geographic expansion via merger will have on growth strategies and firm perception.