US: Legal PowerHouses Arnold & Porter and Kaye Scholer confirm $1bn merger deal

Prominent East Coast law firms Arnold & Porter LLP and Kaye Scholer LLP are set to combine, the latest example of consolidation in a legal market struggling with tepid demand.

The two firms, each of which saw declines in revenue and profits in 2015, will merge in the new year to become a 1,000-lawyer firm with 13 offices across the US, Europe and China.

The firms announced the merger internally and to key clients Thursday, following a vote of the two partnerships.

The deal is the largest law firm combination this year, and comes as the nation’s top law firms work to distinguish themselves from competitors and fight for the most price-insensitive litigation and transactional matters. Demand for law firm services has been eking up at an average rate of about half a percent in recent years, according to Citi Private Bank’s Law Firm Group, compared with annual increases of between 4% and 5% before the downturn.

“We’re in a starkly different environment than the pre-2008 world,” said Dan DiPietro, chairman of Citi’s law firm group. “It almost requires firms to think about whether a merger strategy could work for them.”

Full Content: The Wall Street Journal

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