The National Law Journal’s annual survey of the top 500 American law firms suggests that the merger hungry mid-sized firms continue to thrive, while most of the top-level law firms in the NLJ 500 stagnate in size.
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Could mid-sized firms be the future of BigLaw?

Posted by: Michelle Bigler 10/10/16
Almost a decade on from the onset of the Great Recession and law firms are still grappling at the growth experienced in the years prior to the financial collapse. However the National Law Journal’s annual survey of the top 500 American law firms suggests that the merger hungry mid-sized firms continue to thrive, while most of the top-level law firms in the NLJ 500 stagnate in size.

According to the NLJ 500, the total number of attorneys at the 350 largest US firms last year decreased by 0.6 per cent, to around 146,600 lawyers, compared to about 147,500 in 2014. Though this deflation was no doubt skewed slightly by the exclusion of international giant Dentons from the list, the results mark a reversal of the 0.6 per cent growth in headcount experienced in 2014. This figure is down significantly from the 5 per cent growth, on average, registered by the largest firms in the years prior to the recession, according to ALM Legal Intelligence data.

Though mergers mattered to a significant proportion of the NLJ 500, they are having substantial benefits in terms of growth for the mid-sized firms, with one practice, Barclay Damon – a combination of previous NLJ 350 firm, Hiscock & Barclay, who had more than 200 attorneys, and the 90-lawyer Damon Morey - seeing the largest proportionate gain of associates in 2015, increasing by 76 per cent.

According to figures from consulting firm, Altman Weil, a record 91 law firm mergers and acquisitions took place last year. According to the company there were an additional 20 law firm combinations announced in the US in the first quarter of 2016, four of which involved the acquisition of mid-sized firms, and 16 of which involved small firms. Altman Weil principal Ward Bower commented on last year’s uptick in mergers saying “The record number of deals in 2015 is a reflection of the intense competition among law firms for new work, and we expect the market to remain hot in 2016.”

It appears that US mid-sized firms are certainly in the market for mergers as they work to increase their market share either by expanding demographically or into new practice areas, but the extent to which they are able to compete with the big names in BigLaw remains to been seen.
Tagged In: Law firms, USA
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