November Flurry Propels 2013 to Law Firm Merger Record
Though the talks appear to have hit some snags, Dentons is now in the midst of pursuing a combination that would join its U.S. partnership with Am Law 200 firm McKenna Long & Aldridge. Asia-Pacific legal giant King & Wood Mallesons and London-based SJ Berwin saw their tie-up o live on Nov. 1. (SJ Berwin senior partner Stephen Kon, who led his firm's negotiations with Proskauer Rose three years ago, told U.K. publication The Lawyer in a video interview earlier this month that "the world has changed.")
Elsewhere, The Am Law Daily reported this week that Hogan Lovells has acquired 120-lawyer South African firm Routledge Modise, which separated from British firm Eversheds over conflicts last year. That deal comes about a year after The American Lawyer took a close look at the state of South Africa's legal landscape at a time when Africa's booming economies have led some to label the continent the last great law firm frontier.
Magic Circle firms Linklaters and Slaughter and May, as well as mid-tier British firm Macfarlanes, have recently sought to expand their respective presences in Africa through local referral and alliance networks, according to U.K. publication Legal Week. Williams notes that such arrangements can be difficult to work out given that there 55 countries in the region ranging from what he calls "failed to functional states."
Williams says merger activity has been slower in the U.K. than in the U.S., with most of the year's tie-ups involving personal injury and insurance recovery firms. Irwin Mitchell expanded its personal injury practice by adding Manchester boutique McCool Patterson Hemsi this month and Slater & Gordon—the world's first publicly traded law firm—recently acknowledged its discussions with mid-tier shop Pannone. (Like Altman Weil, Jomati also maintains a U.K. firm merger tracker on its website.)
One large U.K. merger looming on the horizon is the potential union between Lawrence Graham and Wragge & Co. The two firms publicly confirmed this week that they are discussing a deal that would create a combined firm with roughly $275 million in annual gross revenue, according to Legal Week.
Financial imperatives, of course, are driving much of the activity. Global accounting giant PricewaterhouseCoopers, which predicted a series of law firm mergers in Scotland last year, issued a report this month that indicated pricing pressures and a continuing push to cut costs cost could prompt nearly one in three law firms based in northern England to pursue mergers in order to survive.
Such economic considerations are not unique to the U.K. and its London-dominated legal market. The latest quarterly reports compiled by law firm-focused units at Citigroup and Wells Fargo show that demand for legal services remains stagnant across this country's multiple legal centers and that large firms have seen their revenues suffer accordingly.
Though there have been a spate of combinations involving U.K. and U.S. firms recently, there hasn't been a significant one announced since the Norton Rose Fulbright merger went live this summer. (In September, London-based litigation boutique Hage Aaronson combined with New York's Gregory P. Joseph Law Offices, a firm founded in 2001 by former Fried, Frank, Harris, Shriver & Jacobson litigation head Gregory Joseph.)
Asked whether there might be any transatlantic tie-ups between U.S. and U.K. firms in the offing, Williams says there has been a noticeable "slowdown in cross-border activity," while Bower notes that any deals that do materialize will probably take some time to complete.
"The fiscal year for the U.K. firms doesn't end until April 30," Bower says. "So you don't have that immediate pressure to get something done as you might have with a U.S. component."