With Daeryook & AJU and Lin launching full-fledged merger procedures, the merger and acquisition (M&A) clock in the law firm industry is speeding up again. Analysts say the "law firm M&A formula" that shaped the big-firm landscape in the early 2000s amid changes in the legal market structure is being reactivated after more than 20 years.
According to legal sources on the 4th, Daeryook & AJU and Lin signed a memorandum of understanding (MOU) related to the merger on the 29th of last month. If the merger goes through, the two firms' combined sales, based on a simple sum of National Tax Service value-added taxes filing amounts, would be 143.7 billion won, with 384 domestic attorneys. It would create a new large law firm ranking around eighth by sales and sixth by attorney headcount.
At the signing ceremony, both sides' leaders emphasized the market changes that left them no choice but to merge. Managing partner Lee Gyu-cheol of Daeryook & AJU said, "It is a 'perfect storm' phase in which oversupply, intensifying competition, and shifts in work structure are hitting at the same time." Managing partner Im Jin-seok of Lin also said, "As a mid-sized firm, we have achieved all we could, and scaling up is inevitable for bigger cases and deals."
◇ The 'merger formula' from 20 years ago works again
The starting point of domestic law firm M&A is considered the 2001 merger between Shin & Kim LLC and Yeollin Joint Law Office. Shin & Kim LLC, which had strength in advisory for corporations, reinforced its litigation capabilities, and the same year saw the combination of Hanmi Joint Law Office and Lee & Ko.
After that, in 2003, the merger of Hwabaek and Ubang launched HwaWoo; in 2008 came the Jipyung–Jisung merger, followed by the Daeryook–AJU merger in 2009. A series of mergers combining litigation, advisory for corporations, and international transaction capabilities is assessed to have formed today's large law firm structure.
Law firm mergers that once slowed have been picking up pace again since 2023. KLAS and Hankyul merged to launch KLAS Hankyul, and LKB and Pyeongsan merged to become LKB Pyeongsan. This year, additional merger talks between LKB Pyeongsan and Jeongse have also been reported.
The Daeryook & AJU–Lin merger is seen as a case showing this trend expanding beyond mid-sized firms into the large law firm space.
◇ "You have to be different to survive"… the formula for a successful merger
In the law firm industry, an "asymmetric combination" is cited as the key condition for a successful merger. Synergy arises when one side's litigation or case-sourcing base is combined with the other side's advisory capabilities for corporations.
A partner at a mid-sized law firm said, "Law firm M&A is not just about bulking up; it is about combining partners, clients, specialties, and reputations," adding, "The fewer overlapping areas, the fewer conflicts of interest and the greater the real synergy."
Daeryook & AJU has strengths in litigation and overseas legal work, while Lin has grown in advisory for corporations and the IT industry, leading to an assessment that the logic of structural combination is similar.
◇ Big cases go to big firms… "Chemical integration is key"
The structure of corporate legal demand is also changing. This is because more cases are simultaneously expanding into fair trade, criminal risk, labor, tax, control disputes, and international disputes.
Attorney Lee Gyu-cheol said, "It is hard to meet large clients' complex needs with just a few well-known lawyers in a particular field," adding, "The market structure is shifting to one where scale equates to trust."
Attorney Im Jin-seok likewise explained, "You have to reach the level of the Big 6 to access core areas such as banks, large transactions, and fair trade cases," adding, "Scale and creditworthiness determine who is retained."
However, mergers do not always lead to success. In past cases of mergers between law firms, differences in organizational culture, equity structure, and operating methods were not overcome, leading to splits. One law firm attorney said, "Even after a merger, invisible conflicts often remain depending on a person's original firm," adding, "Chemical integration takes considerable time."