Law-firm mergers soared in 2013

There was a boom in law-firm mergers in 2013.

That is the main takeaway from a year-end merger report by the legal consulting firm Altman, Weil of Newtown Square, which has been tracking law-firm combinations since 2007.

There were 88 mergers involving U.S. firms, up 47 percent from 2012.

The trend was national and included firms in Philadelphia and throughout the region. Among them, Blank Rome L.L.P. added eight lawyers in Houston to bolster its maritime and energy practices. Fox Rothschild L.L.P. added 16 lawyers in Denver and seven in San Francisco, while Ballard Spahr L.L.P. brought on 14 lawyers in New York, among other merger activity.

The consulting firm said that while the number of mergers had spiked, the nature of mergers was evolving as well. It has now become relatively rare for two large firms to combine, and mergers more often than not are really acquisitions of a small firm by a firm that is much larger. Such acquisitions carry much less financial risk, and integration of the firms is simpler.

"Most law-firm combinations are really acquisitions, not mergers," said Altman Weil analyst Ward Bower. "The complexity of a true merger of equals is exponentially greater. There are any number of potential pitfalls on the way to the altar."

Altman Weil said the trend was likely to continue. Pittsburgh's Buchanan, Ingersoll & Rooney, which has more than 70 lawyers in its Center City office, says it is in talks with a Florida firm, Fowler, White, Boggs, about a possible combination. Buchanan Ingersoll has 450 lawyers, while Fowler White has 97.

Mergers bottomed out in 2009, during the nadir of the economic collapse, but have been steadily rising since. The reason is reflective of the ongoing challenges faced by firms seeking to increase their business. Clients are keeping a tight rein on legal costs, bringing more work inside, and often demanding discounts from outside counsel.

In that difficult climate, many firms have reasoned, the best way to grow is by picking up small groups of lawyers, whether it is a practice group or an entire firm, who can bring their business with them.