Legal News
More firms merging, research suggests
19/09/2011
New research by the Law Consultancy Network has revealed that a high proportion of small and medium-sized firms have completed mergers in the first half of the year.
Consultant Andrew Otterburn has compiled his third set of six-monthly statistics which show that one in three of the 31 firms surveyed had either merged with another firm or taken over a department in another firm in the last six months.
In comparison, only 20% of firms surveyed had merged six months ago, and only 13% in the same period last year.
Andrew Otterburn said: “Following the increased numbers of conversations about mergers, they are now coming to fruition.
“This trend is likely to accelerate and we may well find that by this time next year many of the most attractive opportunities will have gone.”
According to the research, nearly 30% of firms indicated that they expected to merge during the coming year, with 32% admitting that a merger was unlikely.
Larger firms are more likely to consider merging, the survey also revealed, with 41% of firms with more than 10 partners indicating that they were likely to merge, compared with just 14% of firms with fewer than 10 partners.
Meanwhile, the number of approached made to or by firms with a view to a possible merger has risen by 68% between January and June 2011, compared with figures for the previous six months.
Otterburn suggests that firms should look in their locality at practices which might fit and improve the financial structure for them to compete in the future.
However Nigel Haddon, chair of the Law Society’s Law Management Section executive committee, has warned that firms should only look to merge to build competitive advantage, not simply because they felt they had to ‘do something’.
