The news that just two independent law firms – Uria Menendez and Homburger – made it into Thomson Reuters’s H1 European M&A tables is not, on the face of it, disastrous for independent law firms. At least the bigger ones. The real concern is that, in markets that have seen a huge upturn (such as Spain) and huge downturns (such as Italy), the bigger independents have seen market share fall at the expense of smaller rivals.

Indeed, the Spanish economy has seen deal value jump by 73 percent so far in 2010 to hit $60.82bn. This made Spain the second most lucrative European market behind Benelux ($61.46bn). Even so, Garrigues was the best (or should that be least worst?) in terms of market share following a fall of 1.9 percent. Uria slumped by 40.6 percent and Cuatrecasas was down 50.5 percent decline.

Conversely, the Italian market appears in a terrible state. Value crashed by almost 74 percent to a lowly $9.36bn. Despite that the small and mid-sized Italian firms outperformed their bigger rivals. Like in Spain, Italy’s big three firms all saw value drop. Gianni Origoni Grippo & Partners was down 3.1 percent, Bonelli Erede Pappalardo fell by 19.6 percent while Chiomenti was down 35.1 percent.

In the case of the big Italian law firms, their loss has come at the benefit of smaller and mid-sized firms. Pedersoli & Associati and Legance, for example, posted healthly double-digit increases in market share. Carnelutti was up in 12th, Pavesi Gitti Verzoni was 13th, Labruna Mazziotti Segni was 19th and Miacchi di Cellere Gangemi was 24th. All of these firms saw modest growth in market share.

The success could be seen as an indication that the traditional dominance of the ‘big three’ is starting to wane as the recession continues. As is clear, the market is certainly becoming more competitive. With legal departments driving down costs and seeking cheaper but still high-end advice, perhaps it is the start of a new era for those firms outside of the sizeable elite? They are certainly starting to suggest this in the M&A figures.