Facebook Tracking


When two companies become one – what are the opportunities?

by Sellick Partnership | 12 February 2015

It is becoming more and more apparent that the trend for law firms merging has increased significantly over the last 12 months. The demand to stay ahead of the competition and gain advantage in a fragmented market is causing law firms to find new strategies in order to survive. It has been predicted that at least 42% of the top 50 firms will consider a merger to be very or fairly likely by 2016.

It is true that many firms have now reached a view that seeking a suitable merger partner offers them the best route to achieving their objectives. 

An example of this has been the recent announcement of the Australian-listed firm Slater and Gordon and their acquisition of another two UK firms. Reported in the Law Society Gazette, Slater and Gordon are continuing to expand its operations here in the UK and have acquired North West firm Walker Smith Way and the Cardiff practice Leo Abse & Coen. The firm has now secured a strong direct-to-consumer base, strengthening their position within the UK legal market.

Whilst mergers have always been an option, it was one that relatively few firms entered into previously. The onset of the 2008 recession caused a dramatic change to the legal services industry.

With such high levels of fragmentation, consolidation is inevitable. Mergers occur for all manner of reasons and their effect can be great. A merger makes sense when the combined business is in a better position to compete than each firm was alone.

Merging two business cultures presents a specific challenge, as teams work within a set of processes and rules which could be up for a complete rethink. Potential redundancies or the loss of key staff can make for a turbulent time for management and employees alike, but those staying on may struggle to adjust if communication isn't clear about timescales and expectations. 

Ensuring that morale isn't lost and staff don't lose engagement with the brand and the business are top priorities in order to ensure a smooth transition for clients and stakeholders.

Initial reports from recent mergers area good, with a number of businesses seeing great results. The acquisitions of Lee & Priestly and Denison Till has posted eye-catching results featuring increased turnover and profits. It has been reported a growth of 35% and has resulted in a series of lateral hires.

Whilst the challenges are many, when a merger is successful the opportunities are certainly plentiful…

Have you ever been privy to a merger? What was the impact on your work and the wider business?