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‘Second Largest’ firms getting lion’s share of M&A work

General counsel are consolidating the number of law firms it works with in order to minimize legal expenditures

Findings from enterprise legal management (ELM) software company CounselLink point to the ‘Second Largest’ category of law firms getting a bigger slice of the legal business pie when it comes to mergers and acquisitions (M&A) services. The company conducted research into law firm billings for M&A in 2013, and found that M&A-related work spiked by 77 percent overall. 

Second Largest firms are considered firms that employ between 501-750 attorneys, and took the lion’s share of M&A work last year, according to CounselLink’s research. In previous studies, the largest firms — ones that employ more than 750 lawyers — were the ones that received most of the M&A work, but Second Largest firms have grown as the more favored units to handle that work. In 2013, Second Largest groups earned 37 percent of all outside counsel spending on M&A, and earned 52 percent of all outside counsel spending for high value M&A work, which CounselLink characterizes as those cases where outside counsel billings are greater than $1 million.


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CounselLink’s data found a continued consolidation trend and consistent reduction in hourly rates for M&A work. Over a three-year period, median billing rates dropped from $412 per hour in 2011 to $375 in 2013, which correlates with how Second Largest firms are earnings more M&A billings than bigger firms. Since Second Largest firms’ prices are lower per hour, more M&A cases are being directed there, and the number of law firms employed is being consolidated, according to the data. 

Kris Satkunas, author of the report and director of Strategic Consulting at the CounselLink, noted that turning to slightly smaller firms is also a product of general counsel’s switch in tactics in order to keep spending down: “With general counsel becoming increasingly savvy in managing outside counsel fees, it is not surprising that many are turning to slightly smaller, but credible firms with lower hourly rates to handle even their most mission critical transactions.” 

The consolidation factor is also related to spending matters; general counsel is trending more towards consolidating the numbers of law firms companies work with in order to cut fees.  Satkunas added: “A corporation that consolidates the number of law firms it works with increases it’s negotiating power and builds stronger metric-driven relationships with fewer firms. This in turn also yields efficiencies in legal operations insofar as corporations are getting the results they want.”

Contributing Author

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Juliana Kenny

Juliana Kenny is a contributor to, covering a range of topics including patent litigation, conflict mineral laws, executive compensation, and antitrust regulation. Juliana earned B.A.s...

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