Big Law firms seem to once again be turning to mergers to fuel growth following a pandemic-induced pause in activity, as evidenced by San Francisco-founded Orrick, Herrington & Sutcliffe LLP’s planned merger with Washington-based Buckley LLP.
The merger will result in a firm of more than 1,000 lawyers with a revenue in excess of $1.46 billion.
Lisa Smith, a law firm consultant at Fairfax Associates, says actions are moving beyond regional operations as the nation’s top law firms look at combining with peers for a competitive advantage. Fairfax was involved in the Orrick merger talks.
The merger in question is “part of a bigger trend, and it’s one that we’ve been seeing glimmers of for some time,” Smith said. “We are seeing, and are going to see, more mergers among some of the top firms.”
Through the merger, Orrick is growing its team in New York as well as in two locations in California (Santa Monica and San Francisco). It’s also adding a new office in Chicago, and it’s doubling the size of its Washington office to 180 lawyers, including 75 partners.
“We went about it very deliberately and carefully,” said Orrick Chairman and CEO Mitch Zuklie regarding the merger. “We wanted to make sure that we were really finding similarities and that we would both make each other stronger, and that the combined firm would be better than its twin parts, and we’re quite optimistic that’s the case.”
While merger activity among law firms slowed in 2020 as a result of the coronavirus pandemic, it’s been rising lately, with 46 completed deals in 2022 according to Fairfax Associates.
Just a month into 2023, Morrison Foerster has already announced its merger with Durie Tangri; Holland & Knight is merging with Waller Lansden Dortch & Davis; Maynard Cooper & Gale is merging with Nexsen Pruet; and Shearman & Sterling is reported to be in early-stage merger talks.
“Almost all firms are striving to grow larger and more profitable simultaneously,” said Kent Zimmermann, a consultant for law firm management at The Zeughauser Group. “To do that, a firm generally has to extend its existing strengths and grow in areas that command its rates, and this deal allows for Orrick to do that.”
“At some point, the dam is going to break and there’s going be a lot more [mergers],” said Zimmermann. “We’ll see if that’s this year.”