M&A rife amongst law firms
According to Inside Counsel magazine “a recent Global Legal Post report suggests that merger activity among the top 100 law firms reached a record level in 2013, and this trend is only expected to continue in 2014.”
In an ever competitive market, there is a dawning sense among law firms that in order to thrive in a changing legal market, they either need to specialise in a specific set of practice areas where they can offer value, or scale up to trade under a widely recognisable brand.
When a merger works, the benefits can be profound. Hogan Lovells – the creation of the 2009 merger between London’s Lovells and US firm Hogan & Hartson – is seen as one of the most successful in recent years, propelling the combined outfit to global player status.
According to the latest six-monthly survey by Andrew Otterburn of the Law Consultancy Network, there was an increase in the number of mergers in the second half of 2013, as well as “significant” growth in the general level of discussions between firms.
1. Nearly a quarter of the 37 mid-sized firms polled had merged in that time, with around the same number anticipating a deal during the coming year. For firms of 10 or more partners, however, the figures grew to 50% and 42% respectively.
2. Three-quarters of firms had made or received an approach in the second half of 2013.
3. The main reasons for a merger were improved size or structure (49%), better opportunities post Legal Services Act (19%) and solving succession issues (19%). A merger of two firms is considered a way of expansion for today’s modern legal practice, by enabling both businesses to build a national presence, drive global development and increase service to clients.
Manchester-based firm Linder Myers actually avoided administration through a debt restructuring deal that included investment from Assure Law director Tony Stockdale, who has since become Chief Executive. As a result of this deal, the firm’s managing partner Bernard Seymour has instead taken on the role of senior partner. It is thought to be the first time a deal of this sort has been attempted after a notice to appoint administrators has been filed.