Professional Services: Making it legal

Continuing a trend of the past several years, mergers and growth continue to be in fashion among law firms.

McGuireWoods, the largest firm headquartered in Virginia, has its eye out for new partners, firm Chairman Jon Harmon said in 2023. “I believe the legal industry is consolidating, and that, over time, there’s going to be haves and have nots,” he noted.

McGuireWoods is looking to add attorneys in New York, Chicago, Atlanta and other strategic locations across the country, but smaller firms also are looking to boost their numbers closer to home.

In January, Lynchburg’s Petty, Livingston, Dawson & Richards and Southern Virginia Legal in Danville tied the knot, combining to serve clients across Central and Southern Virginia as PLDR Law. The merged firm has 16 attorneys, retaining offices in Lynchburg and Danville.

That deal followed 2022’s Woods Rogers/Vandeventer Black merger and 2020’s Troutman Sanders combination with Pepper Hamilton, creating Troutman Pepper. And in August 2023, Richmond-based KVCF was absorbed into Williams Mullen, which added 10 attorneys from that deal. The third largest law firm headquartered in Virginia, Williams Mullen also added six lawyers from Pierce McCoy, which rebranded as Pierce Jewett, last year. Williams Mullen has about 250 attorneys across Virginia and the Carolinas.

Nationwide, 48 law firm mergers closed during 2023, remaining constant from 2022, which saw 46 closed deals, according to Fairfax Associates, a legal consulting firm.

Law firms are still competing to hire attorneys, especially those with desirable specialties, which makes mergers more attractive — and it appears this trend will power through 2024 and onward, experts say.

For attorneys, the hiring market is still on their side for the most part, although specialties make a difference. Cybersecurity and technology, mergers and acquisitions, and environmental, social and corporate governance are all hot practice areas. Six-figure signing bonuses are mostly past, but associate attorneys’ compensation was still rising as of late 2023, according to a survey by consultancy Withum Smith+Brown. And anecdotally, work-life balance is still key, especially as younger attorneys enter the profession with different priorities from their elders.

“The practice of law has changed a lot for guys like me and Jon [Harmon] who’ve been at it for decades,” says Mike Herring, McGuireWoods’ Richmond managing partner. “I think we are continuing to be really attentive to the preferences and needs of our younger lawyers.”

While money matters — especially as law school debt averages $160,000, according to the American Bar Association — many attorneys also want to pursue pro bono work and have schedules that don’t interfere with their personal lives.

Briana Stevens, a partner at Harrisonburg-based Wharton Aldhizer & Weaver, says her family law practice is personally meaningful because it’s a “client-centered practice area. I consider it a privilege to guide my clients through an emotional, stressful time in their life.”

Meanwhile, Virginia’s accounting firms are in a similar position, with large numbers of accountants having reached retirement age and not enough young accountants joining the industry. Unlike lawyers, entry-level accountants are finding salaries too low. According to the CPA Accounting Institute for Success, the average salary for CPAs nationwide is $62,410, despite student loan debt and long work hours. Many firms are responding with bonuses, higher salaries and shorter workweeks for new CPAs, who sometimes work up to 100 hours per week during high-volume periods.

Also, firms are prioritizing communication with prospective accountants. “We have to show that accounting is a dynamic profession, not just sitting behind your desk doing grunt work,” says Stephanie Peters, CEO and president of the Virginia Society of CPAs.