Research published by accountancy firm Hazelwoods indicates that the UK has seen a 23% increase in law firm mergers in the past year, rising from 99 in 2021 to 122 in 2022. The resurgence in mergers follows a period of decreased activity due to the pandemic’s impact on the sector. These mergers fall into several categories, including acquiring expertise, achieving economies of scale, addressing retirement plans, and addressing profitability or operational challenges.
Ian Johnson, Associate Partner, notes that expansion-focused law firms feel more confident about acquisitions, particularly those with specialised expertise or struggling profitability. Adopting hybrid working has reduced the need for office space, making mergers a viable solution for combining teams and reducing operational costs. Johnson also suggests fewer mergers occurred in 2021, possibly because partners in firms that performed well during the early stages of COVID-19 deferred retirement plans.
Overall, the growing number of business mergers in the UK legal landscape, along with the underlying motivations and trends, provide valuable insights into the evolving nature of the legal profession and its strategic response to changing circumstances. For firms considering a merger, acquisition, or sale, we provide further information on our M&A services and some key considerations below.
2. Seamless Transitions: The Roadmap to Effective Law Firm Mergers
When considering selling, merging, or acquiring law firms, the expertise of industry specialists like The Strategic Partner can play a pivotal role. Such intricate processes demand careful consideration, planning, assessment, negotiation, due diligence, and successful execution. The complexities arise from the regulated environment, insurance implications, personal requirements, and firm necessities. Our industry experts offer invaluable support to navigate these challenges effectively.
The M&A services provided by The Strategic Partner are tailored to meet the unique demands of law firm transactions. Our comprehensive approach includes several stages, such as:
- Preparation: The engagement starts with an initial conversation to understand the firm’s needs and rationale behind the desired merger, sale, or acquisition. This establishes the foundation for service provision, including setting an appropriate fee level.
- Understanding: The team delves deeper to comprehend the detailed reasons behind the M&A decision. This involves assessing the core features that make the firm an attractive proposition for merger or acquisition. They engage with each owner to grasp their individual requirements, which often vary. They also define the prerequisites for incoming and exiting owners, explore the firm’s structure, and plan how it will integrate with the new entity.
- Prospectus: Once the details are clear, a prospectus is created. If the aim is to sell the firm, the prospectus highlights its key features and attractiveness. In cases of acquisition or merger, the prospectus emphasises why the firm is an ideal partner. This professional document serves as a foundation for conveying core requirements and features to potential interested parties.
- Marketing: Strategy on the approach to informing the market about the firm’s intentions. This involves deciding what information can be made public and whether a discrete or direct approach is more suitable. The marketing strategy aligns with the firm’s requirements and goals.
- Due Diligence: As a critical phase, due diligence involves conversations between stakeholders and establishing the scope, timing, and approach of the process. Information sharing and on-site reviews are carefully managed. This phase sets the stage for negotiations and requires detailed and accurate planning.
- Negotiation: Negotiations can be managed directly by the firm or by The Strategic Partner, depending on the preference. The objective is to ensure the firm’s and its owners’ needs are met effectively.
- Finalisation: The culmination of the process involves drafting agreements to formalise the contractual relationship. Collaboration with legal teams ensures the terms are appropriate and finalise the deal.
- Post-Merger/Acquisition: After completion, integration is managed with a planned strategy to maintain deal integrity. Internal and external messaging is coordinated, and the reason for the M&A is upheld.
Engaging industry experts like The Strategic Partner during law firm mergers, acquisitions, or sales offers a systematic and experienced approach to navigating the complexities involved. From initial preparation to post-transaction integration, our specialist and bespoke M&A services cover all aspects of the process, ultimately contributing to the endeavour’s success.
For further detailed insights, including areas for consideration and a strategy checklist, read our previous guide on Mergers and Acquisitions. – This article was written to highlight some of the areas that law firms and their owners should consider if they are looking at an acquisition, merger, or sale: https://www.thestrategicpartner.co.uk/mergers-acquisitions-key-consideration-and-planning/.
3. Tailored Strategy Planning for Your M&A Needs
At The Strategic Partner, we understand the complexities and challenges that arise during mergers, acquisitions, and sales. Whether you are in the early stages of considering a strategic move or need help with the intricate details of due diligence and integration, our team of experts is here to support and advise your firm.
Our extensive experience in the field allows us to provide comprehensive strategy planning tailored to your specific needs. We will work closely with you to develop a roadmap that maximises opportunities, mitigates risks, and ensures a smooth transition.
Even if the need for an M&A strategy is unexpected, we recognise the importance of proactive planning to achieve your ultimate goals. Our dedicated team is equipped to assist you regardless of the circumstances or motivations behind your decision to pursue this route.
4. Connect with Our Industry Experts for Specialist M&A Guidance
To explore the potential of a merger, acquisition, or sale or to discuss how we can assist in strategy planning, due diligence, or integration, please get in touch. We are eager to engage in a meaningful conversation and provide the support and guidance you need to make informed decisions and achieve success.
For more information about our Mergers and Acquisition Service, you can call us on 0203 911 9710 or you can email us at firstname.lastname@example.org. You can also download our Mergers and Acquisition brochure by clicking on the link below.