New year promises more law firm mergers as talent, tech costs rise

By Sara Merken

NEW YORK, Jan 5 (Reuters) - With three major law firm mergers already set to launch in the coming months, the pace of combinations will likely pick up in 2026 as firm leaders push for greater scale to invest in talent and technology, law firm consultants said.

The end of 2025 brought announcements of several big law firm deals set to take effect this year, including Hogan Lovells and Cadwalader, Wickersham & Taft’s plan to merge into a 3,100-lawyer firm with $3.6 billion in annual revenue.

Law firm mergers increased by 18% year-over-year in 2025, with 59 completed mergers last year compared to 50 in 2024, according to figures published on Monday by law firm consultancy Fairfax Associates.

There was heightened activity among large firms, with seven of the 2025 transactions involving firms that each had at least 100 lawyers, Fairfax said. The majority of mergers included at least one small firm.

Fairfax said it anticipates deal activity to increase across all segments of the legal market in 2026, and that 16 mergers have already been announced for completion this year.

The economics of scale have helped drive legal industry consolidation for years. But consultants said the interest has increased with the growing cost of running a firm, thanks in part to the rising price tags for top lawyer talent and technology.

Investments in recruiting and technologies like artificial intelligence “are much easier to make when you have a larger revenue base, larger profit base, to be able to spread those out across,” said Kristin Stark, a principal at Fairfax.

The larger and more profitable firms have a talent advantage in part because of their ability to be flexible on compensation in a highly aggressive lateral market, said Kent Zimmermann of law firm consultancy Zeughauser Group.

Global law firm Hogan Lovells and New York-based Cadwalader announced plans to merge last month. The proposed deal is subject to a partnership vote, which Hogan Lovells CEO Miguel Zaldivar said may take place this spring.

There are also two big transatlantic deals looming for 2026. Chicago-founded Winston & Strawn and UK firm Taylor Wessing said they expect to combine in May, while the UK's Ashurst and Seattle-founded Perkins Coie said that they plan to merge in the third quarter of the year.

More deals between U.S. and UK firms could be on the horizon, as U.S. firms seek a greater presence in London and other international locations while UK firms see opportunity to grow in the U.S. legal market, including in New York, industry advisors said.

Gretta Rusanow, the head of advisory services for Citigroup's law firm group, said a “decade of modest demand growth” in the legal industry has been a driver for consolidation.

“In order for firms to outperform their peers, they have been taking market share from others,” Rusanow said.