The Transatlantic Surge: Inside US–UK Law Firm Mergers

By Ting Wei Wu

The legal industry is seeing an unprecedented consolidation wave. Law firm mergers surged 18% from 50 in 2024 to 59 in 2025. More notably, as of early January 2026, 16 mergers have already been announced for the year, suggesting that the trend towards consolidation is only accelerating. 

Recent merger headlines include: 

● Ashurst + Perkins Coie: Generates a $2.7 billion revenue firm with over 3000 lawyers 

● Hogan Lovells + Cadwalader: Projected to become the world's fifth-largest firm by revenue ($3.6 billion) 

● Winston & Strawn + Taylor Wessing: Expected to complete in May 2026 

● Allen & Overy + Shearman & Sterling: Completed in May 2024, forming A&O Shearman 

● Herbert Smith Freehills + Kramer Levin: Completed in June 2025, creating a top 20 global law firm 

Industry forecasts indicate one in five large firms is considering acquisition in 2026. Gretta Rusanow, the head of advisory services for the Law Firm Group at Citigroup, explained that with the demand in the legal industry only growing modestly over the past decade, firms are increasingly pushed to consider consolidation as a strategy to outperform others by gaining market share. 

Why now? 

The legal market has stopped growing 

With the demand growth averaging out to be less than 2% yearly, rather than waiting for market expansion, firms must merge to capture existing market share to outperform their peers. Lisa Smith, head of the Washington D.C. office of Fairfax Associates notes: "It used to be easier to manage cross-border mandates with relationships. Now it's challenging when many competitors can handle transactions in their own firms." 

Structural fragility 

Robert Millard of Cambridge Strategy Group explained that law firms have very “thin balance sheets”, and this business model renders firms susceptible to collapse in the event of key partner departures. This fragility makes mergers both offensive (gaining scale) and defensive (avoiding collapse). 

Soaring expenses 

While demand remained flat, costs kept rising – expenses surged 9.1% in early 2025.. Firms are spending heavily on legal tech, knowledge management, AI platforms, data security and recruitment. According to Paul Marmor of the IBA Law Firm Management Committee: "What's driving firms forward are technological developments—AI, new tech. Firms are pooling resources." Consequently, firms raised rates 9.6% to offset costs, but relying solely on price increases risks client resistance. 

Other practical advantages 

Kristin Stark, Principal of Fairfax Associates points out, "AI investments are much easier when you have a larger revenue base to spread costs across." Larger firms can also expand services to existing clients, attract top talent and eliminate competitors overnight. 

Why specifically between UK and US firms? 

The most profitable work is centered in the US due to the exceptional growth in the US legal market in the 2020s. Private capital generates the most lucrative work as unlike relying on corporates conducting the occasional transactions, private capital operates on repeat cycles, continuously acquiring companies and refinancing debt.  Both sides benefit from these mergers. While UK firms instantly gain access to US firms’ private capital clients, US firms get to diversify their clients and gain global capabilities thanks to London’s role as a cross-border transaction hub.  Merged firms not only allow cross-selling to existing clients, but also combine their financials to fund things like expensive AI platforms and data security. 

Challenges 

There are fundamental challenges to these mergers. First, many US and UK firms have large, distinct cultures. This ranges from compensation to management. The difficulty in merging these conflicting cultures can be seen when Bryan Cave Leighton Paisner (2018) experienced significant London partner departures when leadership shifted to Missouri. Even Hogan Lovells (2010) faced early disputes. 

How does this impact the future legal landscape? 

Fewer, larger firms that offer “one-stop-shop” services will dominate. Most firms, especially mid-tier ones will find that mergers provide faster scale than organic growth. Geographic expansion will also intensify, increasing competition for talent globally. Technology will eventually become a differentiating factor, with larger firms being able to afford expensive AI platforms, resulting in smaller firms facing efficiency disadvantages. 

References: 

1. https://littlelaw.co.uk/p/why-uk-firms-keep-merging-with-us-firms

2. https://www.fnlondon.com/articles/us-uk-merger-creates-top-10-international-law-firm-20020128 

3. https://www.legalcheek.com/2025/11/ashurst-to-merge-with-perkins-coie-to-create-global-me gafirm/#:~:text=London%2Dheadquartered%20Ashurst%20and%20US,it%20will%20appeal %20the%20ruling. 

4.  https://www.cityam.com/money-talks-but-culture-counts-in-transatlantic-law-firm-tie-ups/

5.  https://www.ibanet.org/future-of-law-merger-market-for-firms-remains-buoyant-in-a-turbulen t-world 

6. https://www.reuters.com/legal/transactional/new-year-promises-more-law-firm-mergers-talent -tech-costs-rise-2026-01-05/

7. https://www.cadwalader.com/news/news-release/hogan-lovells-and-cadwalader-announce-inte nt-to-combine-creating-a-firm-with-unprecedented-strength-in-key-g20-markets

8. https://news.bloomberglaw.com/business-and-practice/law-firms-eye-mergers-with-lackluster demand-growth-citi-finds