Home

“Asset Deals” an Increasingly Popular Alternative to Law Firm Mergers
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Law firms have alternatives to flat out mergers. They could make an asset deal, an arrangement sometimes preferable for the larger firm to a merger, especially when picking up boutiques. The firm is able to acquire the new attorneys as assets without picking up such liabilities as the small firm’s real estate in the process.

For instance, Post & Schell added the four attorneys of Buck Country firm Galli and Reilly without a merger, Schnader Harrison Segal & Lewis added all six attorneys from Trujillo Rodriguez & Richards without a merger, as reported by law.com.

  
What
Where


“It’s going to happen in situations where there are substantial obligations that come along with the [smaller] firm,” said Altman Weil principal Ward Bower. “What this really amounts to is an addition of a lateral group essentially. The upside of it is you don’t end up with the obligations or the liabilities of the existing firm or the acquires.”

The arrangements vary depending on how the lawyers want to work it out, but a typical arrangement has the small firm keep their work in process and accounts receivable while they pay off their liabilities. What this means for the larger firm is that they aren’t making any money off their freshly required attorneys, not for a while, so that the new layers, meanwhile, can pay off their own business such as rent and insurance and so forth.

“Then they have to support these people from day one and that takes some working capital,” said Bower.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




For large firms that don’t want to take up new real estate property, led alone unfunded pensions liabilities and bank debt, such a lateral move as an “asset deal” is a cleaner operation than a merger, and also keeps creditors at bay. There is some variation on how such arrangements actually work out depending, of course, on what the firms are after in their acquisition of the new partners.





 

RELEVANT JOBS

National Firm seeks seasoned Corporate M&A partner in Austin with Big Law experience

USA-TX-Austin

Culhane Meadows PLLC, one of the largest non-traditional (remote-workplace) law firms in the country...

Apply now

National Firm seeks seasoned Corporate M&A partner in Houston with Big Law experience

USA-TX-Houston

Culhane Meadows PLLC, one of the largest non-traditional (remote-workplace) law firms in the country...

Apply now

National Firm seeks seasoned Corporate M&A partner in Dallas with Big Law experience

USA-TX-Dallas

Culhane Meadows PLLC, one of the largest non-traditional (remote-workplace) law firms in the country...

Apply now

Trusts and Estates Paralegal

USA-PA-Philadelphia

We are looking for a paralegal with a 4-year degree and paralegal certificate, or equivalent experie...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Litigation Associate Attorney

USA-CA-San Francisco

San Francisco office of a BCG Attorney Search Top Ranked Law Firm seeks associate attorney with 1+ y...

Apply Now

Civil Defense Litigation Attorney At Law

USA-MO-Olivette

Olivette office of our client seeks civil defense litigation attorney at law with 1-10 years of expe...

Apply Now

Labor and Employment Law Associate Attorney

USA-CA-Walnut Creek

Walnut Creek office of our client seeks labor and employment law associate attorney with 5-7 years o...

Apply Now

Most Popular

SEARCH IN ARCHIVE

To Top