Most law firms have held recent merger talks, says consultant
ALMOST three quarters of the North West’s law firms have held merger talks with a competitor over the past 12 months, according to a new survey.
Manchester-based legal consultancy Inpractice UK said that 74.2% of the firms who replied to the anonymous poll of the region’s 200 biggest firms admitted to holding potential merger talks, although only a fraction of these resulted in a completion.
Inpractice UK founder Allan Carton said: “If ever there was an indicator that the UK legal services marketplace is set for major consolidation, this is it – particularly as we approach a period where a late surge of interest in ‘Alternative Business Structure’ opportunities will arise in the run up to October.”
He continued: “Law firms are now more open to change – that’s a positive. Top firms aren’t burying their heads in the sand trying to ignore the impending ‘Big Bang’- instead they are facing it head on and demonstrating greater commercial awareness.
“The same cannot be said for all the smaller firms, where there is a dilemma with many partners struggling to see a future when they could be more proactive in getting organised.
He added that changes in regulation and pressure from banks would be the two main drivers of merger activity.
“Banks no longer view law firms as a safe bet,“ he said. “The high-profile demise of Halliwells has shown what can happen. I’m not sure anyone really expected such a major firm to fail – the shockwaves are still being felt.”
