denotes premium content | Nov 22 2008 News
posted 22 Jul 2008
Two-fifths of law firms hoping to merge
OVER TWO-FIFTHS (43 per cent) of UK and international law firms expect they will be involved in a transformational merger within 12 months, according to new research.
The study, carried out by NetworkMP and sponsored by BDO Stoy Hayward and Jomati Consultants, also found over two-thirds (68 per cent) of firms had been in mergers discussions in the preceding 12 months.
Tony Williams, principal of Jomati and former managing partner of Clifford Chance, said: “The legal industry could witness over 100 firms merging in England over the next year, either with regional, national, or US firms.
“This may sound bullish but market conditions will force as much as 25 per cent of smaller firms to merge, a significant number of very small firms will cease to trade and between 10 to 15 per cent of medium-sized firms will also look to merge.”
Although four-fifths (80 per cent) of firms saw “market conditions” as the greatest single threat to law firms’ fortunes in the year to come, only six per cent predict a deep recession. Fewer than half (48 per cent) think a mild recession is likely.
In spite of the widespread appetite for merger, almost a third (32 per cent) of firms think the greatest growth opportunity will come from within – through lateral hires or winning new clients.
The study focused on 90 professional-service firms, including 57 law firms. Respondents were predominantly managing partners and chief executives of these firms (86 per cent), with the remainder finance directors or chief operating officers.
