The final numbers are in and it’s official: 2011 was a comeback year for law firm mergers, and nowhere more than in Los Angeles.

The number of law firm mergers across the country jumped 67 percent last year, while Los Angeles led all other cities with six, according to a study this month by the Hildebrandt Institute. In each of those, an L.A. boutique was acquired by a larger firm, generally from outside California and with a bigger national presence.

The spike in mergers is a sign that the overall industry has recovered enough so that larger firms aren’t afraid to make moves. But at the same time, the downturn has also made it harder for smaller firms to find work.

“There’s a broad consolidation under way in the industry,” said Brad Hildebrandt, chairman of the New York law firm consultancy Hildebrandt Institute. “Competition for business is quite intense and some local and regional firms may feel that they are at a disadvantage.”

Notable mergers included the acquisition of Quateman LLP and Hennigan Dorman LLP by St. Louis firm Polsinelli Shughart PC and New York’s McKool Smith PC, respectively. Quateman and Hennigan have said that their mergers were driven by a need to link up with a national platform, and not with any financial difficulties.

Though it’s becoming harder to run a small firm, any concerns about independent L.A. firms dying off is premature, said Sandy Lechtick, president of Woodland Hills legal search firm Esquire Inc.

“I expect there to be a continuing of this trend, but I must say there still are some smaller firms that have done quite well that are not looking to merge with anybody,” Lechtick said.

There are no signs of the trend slowing down. So far, the number of mergers has been almost double what they were at the same time last year, according to the study.

New Office, Lower Rates

David Allen opened Dallas law firm Akin Gump Strauss Hauer & Feld LLP’s first L.A. office in 1997, growing it from eight attorneys to around 90 as the office’s managing partner. But last February, Allen left with five other attorneys to launch an L.A. office for smaller Indianapolis firm Barnes & Thornburg LLP, citing a need to lower billing rates.

Since then, the L.A. outpost of the Indiana firm has grown to 16 attorneys – 12 of them from Akin Gump. The latest is Howard Fabrick, a former Akin Gump partner who joined Barnes this month.


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