American Lawyer Media (or more precisely, Steven Brill the founder of the American Lawyer) pioneered the collection of law firm data in the mid-1980’s with the publication of the first Amlaw 100 list. For better or for worse, the ALM rankings have driven decision making in the legal market for almost 40 years. I wrote an historical review of ALM in the last time ALM was sold to an investor consortium the Wasserstein Group in 2014 . I am happy to see that the new owners have demonstrated an ongoing commitment to leveraging ALM’s unique data assets to help law firms navigate a continuously churning legal market. Today they announced a tool that can be used in scenario planning for mergers and even lateral groups.
The new M&A intelligence tool is available to Legal Compass subscribers. The tool enables law firms to do scenario planning on the financial impact of merging with another firm in one of the ALM rankings. In addition you can input data on an un-ranked firm or a group of lateral attorneys. Then in one click you will get a series of tables and charts which illustrate the merged firms finances, profitability, diversity and revenue rankings. Firms can also compare practice area headcount, global and national office locations showing overlap or opportunity for expansion.
Patrick Fuller, the Vice President of ALM Legal Intelligence and Steve Kovalan, Director of Research, Legal provided me with a demo and some insights. There are currently over 250 UK and international law firms which can be analysed using the merger tool. Fuller offered a pithy summary of the products value: “revenue is expensive” and he illustrated the potential cost to a firm of a merger that would ratchet them up the ALM rankings by only a few places. According to Kovalan and Fuller this product will continue to expand in both content and functionality. I suggested that they add some charts with a 3 or a 5 year revenue projection. Law firms generally take a financial hit in the first year following a merger – it often takes time for the costs and conflicts to shake out (e.g. multiple offices in one city and staffing overlap) and for clients to transition their work (in the case of lateral groups.)
This week ALM publication Legal Week published their first UK 50 list. According to Fuller, there will soon be a UK 51-100.
Here is the press release:
ALM Intelligence Unveils Law Firm Mergers and Acquisitions Modeling Tool
An Upgrade to the Award-Winning Legal Compass Platform
New York, NY – September 19, 2018 — ALM Intelligence’s Legal division has released new mergers and acquisitions (M&A) capabilities. The innovative feature allows Legal Compass subscribers to quickly and easily analyze potential mergers and acquisitions within the legal market.
“Law firms are always playing the ‘what-if’ game, and this tool enables firms and consultants to assess various potential combinations,” said Patrick Fuller, Vice President, Legal, ALM Intelligence. “Additionally, it becomes a core competitive intelligence tool for rivals as part of the assessment of pending law firm mergers.”
The M&A modeling tool in Legal Compass provides users with:
- The ability to model a merger of law firms on our Am Law 200, Global 100 and UK 50 ranking lists, view their combined financial histories, and project their combined Am Law and Global ranks
- Insight into the global footprint of the combined firms and the ability to see where overlap would reduce operating budgets and increase domestic and international coverage
- Information on practice areas – discover which firms would bring strength in which areas
- Diversity data on both firms, and how the combined firm would stack up on ALM’s Diversity, Gender and LGBT Scorecards
“The new Mergers and Acquisitions tool allows our users to look at the possible combination of two firms and determine whether there is real potential in a union,” said Eric Ryles, Vice President of Customer Solutions, ALM Intelligence. “By combining the financials, headcount data and global footprint of these firms we can see if it makes more sense to proceed to due diligence or to look for another target. This saves the time and effort and the expense of pursuing weak opportunities.”
ALM has long covered the ins and outs of law firm mergers, and one that recently has received significant attention is the rumored link-up between Allen & Overy and O’Melveny & Myers. With ALM Intelligence’s M&A tool, Legal Compass subscribers can evaluate the practice area capabilities, financials and worldwide reach of the combined firm. Users of the tool will instantly see that the merger would rank the combined firm 4th in the Global 100 with nearly $3 billion in gross revenue, and that the firm would have around 3,000 lawyers and a physical presence in approximately 50 cities across the globe.
To find out more about the Legal Compass M&A tool visit: https://www.alm.com/intelligence/solutions-we-provide/business-of-law-solutions/legal-compass/legal-compass-infographic/
About ALM Intelligence
ALM Intelligence, a division of ALM Media LLC, supports legal, consulting, and benefits decision-makers seeking guidance on critical business challenges. Our proprietary market reports and analysis, rating guides, prospecting tools, surveys, and rankings, inform and empower business leaders to meet business challenges with confidence. Please visit www.alm.com/intelligence for more information.
About ALM
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