US law firms are combining and acquiring at a record pace

At a time when law school applications are plummeting and legal job prospects are grim, law firms are consolidating at a rapid clip. There were 48 mergers or acquisitions among US law firms in the first two quarters of 2015, according to the Pennsylvania firm Altman Weil.

The deals have tended to be big firms gobbling up smaller ones.

That’s the largest first-half number since the firm started tracking buyouts and mergers nine years ago. Altman Weil principal Eric Seeger said in a statement that he expects deal activity to be “extremely active for the foreseeable future,” and if M&A continues apace it will surpass 2013’s record 88 total deals:

The moves largely involve big firms picking up small, profitable ones in regional areas where they’re looking to build up business (most notably Chicago and Houston) or to supplement specific areas of business where they’re weaker or aren’t making much money.

The biggest deal was global giant Denton’s buyout of Atlanta’s McKenna Long & Aldridge. The smaller firm had 400 lawyers when the deal was first announced in April, and about 100 chose to leave McKenna before the two firms officially combined earlier this month.

These don’t look to be mergers for firms looking to increase the number of lawyers. Some lawyers might end up losing jobs.

“In 2015 headcount growth is usually not the primary driver of these deals – although Dentons might be an exception,” Seeger said. “Most firms are pursuing strategic, incremental additions with an eye on profit growth rather than headcount.”

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