Data released by legal consultancy Fairfax Associates shows at least as many large law firm mergers completed in the first quarter of 2023 than in all of 2022. The report highlighted that at least one more merger of that size would be part of 2023’s deal count, as Southeastern U.S. firms Maynard Cooper & Gale and Nexsen Pruet combined on April 1 to create a firm called Maynard Nexsen.
In 2022, only two sets of large firms merged all year, in deals between Arent Fox and Schiff Hardin and Taft Stettinius & Hollister and Jaffe Raitt Heuer & Weiss. However, the trend has been dramatically changing in 2023, with 16 total law firm mergers being tracked by Fairfax Associates in Q1, which is an increase from 14 in the same period in 2022 but closer to Q1 2021, which saw 17. The firm also reported 46 completed mergers in 2022 as a whole, representing an increase from 41 the prior year.
Among the large law firm mergers completed this year, 1,400-lawyer Holland & Knight merged with 257-lawyer Waller Lansden Dortch & Davis in March, and 1,050 lawyers from Orrick, Herrington & Sutcliffe combined with 100-lawyer Buckley in February. Fairfax defines large mergers as those where both law firms have at least 100 lawyers each.
Smith, Gambrell & Russell, a 285-lawyer firm, also just completed a merger with 110-lawyer firm Freeborn & Peters. That deal was set to close on March 1 during the first quarter, but the firms said in a statement that they completed the combination on April 1.
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Kristin Stark, a principal at Fairfax, commented that while the number of significant mergers in a given quarter or year may be coincidental, the interest in large combinations among firms is “dramatically higher” than it was 10 or 20 years ago. However, she noted that getting to the finish line can be particularly challenging for two large firms due to increasing client conflicts issues and deal terms made more complex as firms grow and develop more “institutional structure” in their operations.
The report comes after recent talks between other prominent law firms fizzled. Shearman & Sterling and Hogan Lovells called off merger discussions last month, and talks between Womble Bond Dickinson and U.K. firm BDB Pitmans ended in February.
Overall, the legal industry has seen an uptick in dealmaking in 2023, with law firms looking to combine resources and expand their capabilities. As law firms become larger, the challenges in completing these mergers may increase, but the interest in large combinations remains high. It will be interesting to see how this trend develops in the coming months and years and how it will affect the legal landscape.