Law firm combinations at lowest point in 10 years, report says

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There were seven law firm combinations announced in the United States in the second quarter of 2020, a sluggish pace that is likely caused by the pandemic-driven economic slowdown, according to an online service that tracks law firm mergers and acquisitions.

All seven combinations – one of which involved two Maryland firms — were the acquisition of small law firms with 20 or fewer lawyers, said Altman Weil MergerLine.

This was the lowest total deal number recorded in a quarter since the third quarter of 2010, when law firms struggling under the effects of the Great Recession completed only five combinations.

“Uncertainty is the biggest stumbling block to deal-making right now,” Altman Weil principal Eric Seeger said in a news release.

“Until firm leaders have a better sense of the depth and duration of the current economic downturn, they are going to proceed with caution. We expect the third quarter will be very slow as well,” Seeger said.

All big deals have been put on hold until leadership teams can meet in person, according to Altman Weil. Some firms that might otherwise consider a merger don’t want to enter negotiations in a weakened position and are waiting for the market to improve.

The Maryland deal involved the April merger of Decker, Tychostup, & Friedman Albers & Associates of Dundalk into Westminster-based Albers & Associates.

The two largest deals announced in the second quarter of 2020 were made by AmLaw 100 law firms. In its second European acquisition of 2020, Littler acquired 20-lawyer, Polish labor and employment firm Paruch Chrusciel Schiffter.

Cozen O’Connor added nine-lawyer, Philadelphia start-up boutique Baer Crossey McDemus.

The five additional combinations announced in the quarter were all acquisitions of firms with five or fewer lawyers. Four of those were same-state combinations in Florida, Pennsylvania, Ohio and Maryland; the fifth was a small Florida-Illinois merger.