- Vault Rankings
- Research Companies
- Explore Internships
- Career Advice
- Vault Guides
Citing irresolvable conflicts of interests between their respective government clients, yesterday Orrick (#37 in the Vault Law 100) and Pillsbury (Vault Law #60) called off their anticipated mega-merger that would have created one of the 10 largest U.S. law firms. The commitment-phobia must have been contagious: less than 24 hours later, Dentons (Vault Law #93) and McKenna Long & Aldridge called off a tie-up that would have created one of the three biggest law firms by headcount worldwide. Both failed agreements would have added to the growing list of law firm mergers in 2013. The number of U.S. mergers announced this year has already surpassed the record high of 70 set in 2008. Here are some of the notable unions that have been announced or completed in the past year:
The merger craze has been fueled by an economic climate in which the demand for legal services has stayed flat. How can firms make up for lost business without hiring laterally and leasing space in new cities (both costly undertakings)? Mergers are an opportunity to gain new clients, reduce expenses by consolidating offices or renegotiating contracts with third-party vendors, and in some cases “trim fat” by saying farewell to staff and/or unproductive partners. Law firms that have expanded across the globe boast the ability to handle cases across multiple jurisdictions and provide a one-stop shopping experience for large corporations with a wide range of legal needs.
Most mergers announced in late 2013 are scheduled to take effect on January 1, 2014. Experts say that more announcements are on the horizon. A potential union is brewing between DC powerhouse Patton Boggs (Vault Law #71) and Dallas firm Locke Lord (Vault Law #92) amidst the former’s plan to restructure after a rough start to the year. Patton Boggs made two rounds of cuts in 2013, most recently laying off 10 lawyers and 30 staff in November after shedding 30 attorneys and 30 staff in March. The potential merger would boost both firms’ presence in New York and DC.
Is bigger really better? Not necessarily—and in the case of the failed Dentons merger, the number of McKenna Long partners who espoused that view prevailed. The Wall Street Journal reports that those partners did not believe it was “‘the culture of their firm’” to merge, and that Dentons’ verein structure turned them off. Under that structure, which is used by many behemoth firms including Hogan Lovells, Norton Rose Fullbright, and Baker & McKenzie (Vault Law #32), partners share a brand but maintain separate profit pools. A shift in company culture is a risk of expansion, and associates who take Vault’s survey often report dissatisfaction with management related to a recent merger. Firm policies change and associates often feel lost in the shuffle. But attorneys should get used to it, because the merger fad isn’t ending anytime soon. Is your firm the product of a merger? Tell us how it affected you in the Comments section below.
A Bad Week for Law-Firm Hook-Ups: Another Possible Merger Fails (WSJ)
November Flurry Propels 2013 to Law Firm Merger Record (AmLaw Daily)
Want to be found by top employers? Upload Your Resume
Join Gold to Unlock Company Reviews