In recent years, there has been a trend of boutique law firms scaling up through mergers, a trend driven by a number of factors, including the need for boutique firms to expand geographically and in headcount as a tight talent market strains smaller firms. Boutique law firms are small in scale, bring together talented lawyers practicing in one or two niche areas, and have what is called founder passion. This entrepreneurialism and enthusiasm are often what separates them from full-service practices or ‘Big Law’ firms.

One recent example of this trend is the merger of Los Angeles 10-lawyer firm Barton Klugman & Oetting with Clark Hill. Barton Klugman & Oetting specializes in business litigation for large national banks and M&A matters for middle-market companies. This merger marks the fifth successful combination for Clark Hill with smaller law firms since 2022, showcasing the firm’s commitment to strategic growth and industry leadership. 

“Their Los Angeles office was really litigation-dominant, and they wanted to add to their depth in transactional, corporate, tax and other areas. They had some really good people but needed more, and that’s what we brought to the table,” said Tod Beebe, who was managing partner of Barton Klugman and joined Clark Hill as a member. Barton Klugman & Oetting brings 10 skilled lawyers into Clark Hill’s Los Angeles office, effectively increasing its headcount in the city to an impressive 75 lawyers.

A report from Fairfax Associates found that firm mergers remain on the rise and are due for “an acceleration” as the year continues. The report further indicates that 59% of all mergers included firms with between 5 and 20 lawyers. The number of mergers during the second quarter of 2023 was higher than during the second quarters of 2021 and 2022. 

Mergers between larger and boutique firms make perfect commercial sense, increasing the overall value of the business and offering multiple benefits, such as:

• More competitiveness: A larger firm may mean more clients, more work, and a better pool of resources, especially for those coming from smaller firms.

• More international scope: Mergers allow smaller firms greater access to international and emerging markets.

• Boosting fee income: By merging small practices, firms can boost fee income and access larger financing pools for expansion.

• Competing in niche practice areas: Merging with a boutique makes perfect commercial sense as it allows firms to compete with other firms in niche practice areas and client sectors.

As client demands evolve and mergers are likely to continue over the next months, it will be interesting to see how boutique law firms adapt and grow, potentially giving rise to a new dynamic in the industry, changing how firms operate and serve their clients.