As mergers surge, Indiana law firms not finding suitors

The legal industry continued two trends in the first quarter of 2018 — the white-hot pace of law firm combinations is getting hotter, and none of the acquisitions involved a firm either based in Indiana or with an office in the Hoosier state.

Altman Weil, Inc. released its first report of the new year Wednesday. In the opening three months of 2018, a total of 30 law firm combinations were recorded and three new 1,000-lawyer firms were created.

This compares with the first quarter of 2017 with 28 combinations reported. Last year ended with 102 mergers and acquisitions, which topped the record of 91 set in 2015. The only combination involving an Indiana firm in 2017 was the acquisition of Evansville-based Bamberger Foreman Oswald & Hahn by Stoll Keenen based in Lexington, Kentucky.

“I don’t think it’s neglect of Indiana or people saying Indiana is an unattractive market,” said Eric Seeger, principal at Altman Weil. “Indiana was a hot market not so many years ago.”

According to Altman Weil, the last time Indiana appeared on the “largest combinations list” was in 2011 when Baker & Daniels, based in Indianapolis, was acquired by Faegre & Benson, headquartered in Minneapolis. The resulting Faegre Baker Daniels LLP then had about 770 attorneys.

Also in 2011, Bingham McHale in Indianapolis acquired Greenebaum Doll & McDonald in Louisville to create Bingham Greenebaum Doll LLP. And Ice Miller LLP, based in Indianapolis, announced its merged with Schottenstein Zox & Dunn Co. LPA, then the fourth-largest law firm in Columbus, Ohio. 

Seeger explained as firms in a particular region or state are the target of mergers, other firms wonder if more opportunities are available there. This heightened awareness attracts closer attention and can spur more combination activity.

“There are Indiana firms that are attractive merger candidates for out-of-market firms,” Seeger said, adding it is “certainly possible” that Hoosier law offices will be part of the merger activity in 2018. “A lot of firms are talking in all parts of the country.”

Conversations have brought change to the Indianapolis legal market in recent months despite the lack of mergers. Among them:

• In December 2017, Pence Hensel LLC dissolved with the principle attorneys, Linda Pence and David Hensel going to SmithAmundsen LLC and Hoover Hull Turner LLP, respectively.

• In February, Hill Fulwider dissolved and its attorneys reorganized as two firms — Hill Knotts & Goldman LLC and Steffey Wahl LLC.

• In March 2018, Taft Stettinius & Hollister LLP announced it would welcome 14 attorneys from Benesch Friedlander Coplan & Aronoff LLP. The Cleveland-based law firm is closing its office in the Circle City.

The largest deal of the 2018 first quarter was the announced merger of Bryan Cave, a 900-lawyer firm based in St. Louis, with Berwin Leighton Paisner, a 650-lawyer firm based in the United Kingdom. The other two combinations that created 1,000-attorneys firms involved Texas firms. Hunton & Williams, based in Richmond, Virginia, entered into a merger agreement with Andrews Kurth, based in Houston, Texas, while Foley Lardner, based in Milwaukee, Wisconsin, announced a combination with Gardere Wynne Swell, headquartered in Dallas, Texas.

Eight cross-border combinations were announced in the opening months of 2018. Seven of the eight were acquisitions by mega-firm Dentons, which will add 170 lawyers from law firms in Indonesia, Kenya, Malaysia, Mauritius, Barbados and the Cayman Islands to its 8,100-lawyer roster. The other cross-border combination was DLA Piper, a 4,000-lawyer international firm in New York, which will acquire a 20-attorney firm in Santiago, Chile.

Acquisitions of law firms with 20 or fewer attorneys accounted for 73 percent of all combinations in January, February and March of 2018. The acquiring firms focused primarily on the Southern United States with Florida being the top market.

Four AmLaw firms snatched smaller firms in this year’s opening quarter.

Archer & Greiner opened a New York office with the seven-lawyer bankruptcy firm of DiConza Traurig Kadish. Fisher Phillips grew its Seattle footprint with the six-lawyer labor & employment boutique firm of Michael & Alexander.

Also, Akerman added six professional liability experts by acquiring Ackerman Law Group in West Palm Beach, Florida, while Buchanan Ingersoll & Rooney acquired three-lawyer immigration law boutique Weiss Alden & Polo in Miami.

Seeger sees the combination activity being driven, in part, by the limits of the lateral market. Specifically, firms are looking for opportunities to grow because lateral hires have not achieved the growth they wanted. Moreover, partners are feeling confident about making the investment of merging or acquiring another firm.

The complete list of law firm mergers and acquisitions announced to date in 2018, as well as a summary of 2017 deals may be read here.