Over the last five years, law firms have maintained a steady and essential presence in the M&A landscape. Despite fluctuations in deal activity driven by economic cycles, interest rate changes, and global events like the COVID-19 pandemic, the role of legal advisors has remained consistent. This analysis examines key trends in law firm involvement in PE-backed M&A deals.
Consistency in Law Firm Involvement
The proportion of private equity-backed deals involving legal advisors has remained stable. There was a slight increase during the M&A boom of late 2020 through 2021, reflecting increased demand for legal expertise during a period of heightened deal volume, but this uptick reverted to historical averages as the market normalized.
Most Common Deal Types Involving Legal Advisors
Law firms play varying roles depending on the type of transaction:
- Buyouts Dominate: These transactions accounted for the majority of law firm activity.
- Add-Ons: In contrast, smaller deals like add-ons are less reliant on law firm involvement, reflecting their lower enterprise value and reduced complexity.
- Rising Involvement: Legal advisor participation grew substantially in buyouts (+10%), financings (+9%), and recapitalizations (+8%) during the last five years.
Leading Law Firms in M&A
A handful of firms consistently emerged as leaders in M&A advisory:
- Buy-Side Leaders:
- Kirkland & Ellis led the market with 1,163 transactions over the last five years, more than doubling the deal count of Ropes & Gray (442 deals), the second-place firm.
- Other significant players included Latham & Watkins (296 deals), Jones Day (278 deals), and McDermott Will & Emery (278 deals).
- Despite these figures, the M&A legal advisory market remains competitive, with no single firm dominating the space.
High-Profile Law Firm Mergers Since January 2023
The legal industry has witnessed significant consolidation through high-profile mergers, signaling strategic shifts to enhance geographic reach, service offerings, and competitive positioning. Notably, four of these mergers were announced in September 2024, demonstrating a flurry of activity as firms adapt to evolving market dynamics. Here are five key mergers reshaping the landscape:
- Locke Lord and Troutman Pepper Hamilton Sanders
- Announced: September 6, 2024
- Expected Close: January 1, 2025
- Details:
This merger will form Troutman Pepper Locke, a law firm boasting more than 1,600 attorneys across 33 U.S. offices and two in Europe. The combined firm will have a presence in all 10 of the largest U.S. legal markets, significantly enhancing its capabilities and client reach. - Learn more
- Shearman & Sterling and Allen & Overy
- Announced: May 21, 2023
- Closed: May 1, 2024
- Details:
The creation of Allen Overy Shearman Sterling (A&O Shearman) integrates nearly 4,000 lawyers and 800 partners across 47 offices in 29 countries. The firm serves major global clients, including a significant proportion of businesses listed on stock exchanges such as NYSE, NASDAQ, LSE, and Euronext. - Learn more
- Ballard Spahr and Lane Powell
- Announced: September 9, 2024
- Expected Close: January 1, 2025
- Details:
The combined firm, which will continue under the Ballard Spahr name, will house over 750 attorneys in 18 U.S. offices. This merger expands the firm’s footprint into the Pacific Northwest, adding new offices in Anchorage, Portland, and Seattle. - Learn more
- Womble Bond Dickinson and Lewis Roca
- Announced: September 10, 2024
- Expected Close: January 1, 2025
- Details:
This merger will create a firm with 1,300 lawyers in 37 offices across the U.S. and U.K., operating as Womble Bond Dickinson. The combined entity will strengthen its practice areas in finance, bankruptcy, intellectual property, real estate, complex litigation, and corporate law. - Learn more
- Sherman & Howard and Taft Stettinius & Hollister
- Announced: September 23, 2024
- Expected Close: January 1, 2025
- Details:
The merger will create a combined firm with 1,050 attorneys and gross revenues exceeding $810 million. The new firm will operate under the Taft brand, expanding its reach into 10 states and Washington, D.C., while enhancing its service capabilities in corporate, litigation, and other key areas. - Learn more
The role of law firms in M&A activity has been marked by stability rather than dramatic change. Their participation remains vital in high-value deals and complex transactions, ensuring compliance, mitigating risks, and providing strategic guidance. As M&A dynamics evolve, law firms continue to adapt, maintaining their critical role in supporting the dealmaking process.
