THE LEGAL PROFESSION


FOCUS FEATURE


Mergers can enable law firms to provide a wider range of services and become a one-stop-shop for their clients


In all walks of life the ability to adapt and evolve is paramount if you’re going to first survive and then thrive. In this respect, the legal profession is no different. The adapting part, you’d assume, is almost second nature. Legislative changes, both major and minor, are part and parcel of life, with legislation widely regarded as one of the main functions of Government. There are countless examples of how once stable and


entrenched policies and laws have been, and continue to be, adapted to ensure they’re fit for purpose in modern society. You only have to think of significant changes in driving laws, such as the recently-introduced increased punishment for drivers found to be using their phones at the wheel of their cars, which came into force on 1 March this year. Less black and white


are the laws surrounding the internet and social media use, both in people’s private and professional lives. Technological advances can create a raft of legal challenges. It’s worth remembering that the internet came into being as we know it only in the 1990s. A glance at the Legal Business Support section of each


the most basic of terms, it can provide a perfect model for expansion for a growing, well-performing firm. Conversely, for a struggling business – and its staff – merging with, or being acquired by, a larger and/or more stable counterpart can offer a far better option than the alternative. But why is such practice so prevalent among law firms?


David Williams, Chairman of Geldards LLP, offered a fascinating insight during an interview with this publication and it’s clear that there’s no cut-and-dried answer. “There’s been merger mania in the sector and I think


‘For a struggling business merging with, or being acquired by, a larger and/or more stable counterpart can offer a far better option than the alternative’


there are a number of factors,” he said. “One is Lehman Brothers and the downturn and there were a few firms that had some difficulties so there were some necessary mergers and there’s also a ‘big is better’ perception sometimes and while I’m not entirely sure that’s true, there is a certain element of size matters. There also seems to have been a bit of a ‘me too’ element, everyone else seems to be doing so, so we should as well.” In a highly competitive


edition of Business Network, and the array of legal changes highlighted by law firms offers a glimpse at the unenviable task those in the profession have of interpreting and making sense of changes before passing this knowledge and expertise onto their clients. So adaptation is a well-worn track that legal firms have


been walking through the centuries. It’s a track that will no doubt be used extensively as and when the results of the Government’s two-year negotiation with the European Union are known; after Prime Minister Theresa May triggered Article 50 on 29 March. Evolving to external factors, however, can be more


difficult to judge and prepare for. These can range from market forces – such as the decline in demand for law firms offering a particular specialist or niche area within the multifaceted world of law – or higher level issues that affect the whole business environment. As far as the big law firms are concerned – but smaller ones also – the dot-com crash of 2000/2002 and, more recently, the financial crisis of 2007/2008 provided, for some, insurmountable issues that adaptation alone could not fix. Of course, in these instances, the legal profession was far from alone in experiencing some major changes. While businesses of all sectors and sizes have key


decisions to make when dealing with internal and external factors when it comes to evolving – whether for preservation or expansion – one strategy appears particularly synonymous with the legal profession: the merger. The logic behind companies merging or, as is often the case, one company acquiring another, can seem obvious. In


profession that covers a vast array of different specialisms, the desire to diversify and offer an umbrella coverage to clients and potential clients, a one-stop-shop if you like, may also prove an attractive proposition to firms, according to the University of Law, a long-established UK-based provider of legal education. In an article published on its website, it argues that:


“What may be driving this activity 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.” Chamber Student – which specialises in reviewing and


researching all aspects of law – offers a more expansive view on the popularity of mergers. It argues, via www.chambersstudent.co.uk, that: “Mergers


happen for all manner of reasons. Some are genuine attempts to strategically expand a firm’s areas of practice or gain a national presence. International and transatlantic mergers are common too: they aim to make firms which were previously merely international truly global. Mergers happen among regional and national firms too: two examples include the 2015 tie-up between Midlands firms Shakespeares and SGH Martineau which created Shakespeare Martineau (a Chamber member)”. As you’d expect, the results of a merger between two law


firms, or any businesses for that matter, can range dramatically from profoundly successful to firms going out of business. With that in mind, weighing up the pros and cons of any


potential merger or acquisition is essential, with due diligence often taking months, if not years in some cases. So for the winners, what’s to gain?


business network April 2017 35


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60