More than a quarter of top-100 firms were involved in a merger in 2012, in what has been described as a record year for deals.
Research by Jomati Consultants has found that 26 deals were announced by top-100 firms during the past 12 months.
That was a 24% increase on merger activity during 2011 – and the year ahead is predicted to be even more significant for both domestic and international mergers.
Analysts say firms are rushing to grow in new markets to fend off low growth expectations and pressure on fees in the UK.
Client demand, competition from alternative business structures (ABSs) and limits to profitability in the personal injury sector are also factors behind some deals.
Tony Williams, Jomati principal and former managing partner of Clifford Chance, said 2012 had been an ‘extraordinary’ year for merger activity.
‘It appears that consolidation is taking place right across the legal market and across multiple regions at the same time.
‘We expect this trend to continue in 2013 because the strategic logic behind such deals is only growing stronger. Indeed, there may well be two or three rounds of merger activity as firms first strengthen their domestic capability and then deepen their international offering.’
There were nine international deals in 2012, including the three-way tie-up between SNR Denton and Salans in France and Fraser Milner Casgrain in Canada. City firms Norton Rose and Herbert Smith were also active with mergers with firms in the USA and Australia respectively.
Of the 15 domestic deals involving top-100 firms, one-third were between English and Scottish firms as they sought to build ‘single market’ capability.
Last year was also the first to see mergers involving ABSs, which included Slater & Gordon joining with Russell Jones & Walker.