A surprising number of top law firms are eyeing up merger with or acquisition of a firm from another profession, accountants BDO have found.
A survey of 111 firms of all sizes found that 34% could envisage such a move in the next three years, while 3% said they would definitely do it.
A more detailed breakdown of the figures, provided to Legal Futures, revealed that one of these firms was in the top 10 and a further nine were in the top 25. Five firms were in among those ranked 26-100, nine were from 100-150, and 16 were outside the top 150.
Nick Carter-Pegg, a partner and head of professional services at BDO, said it was “perhaps surprising” that so many of the top 25 had registered interest. “Could this indicate possible mergers with accounting firms, or with other areas such as property consultancy or corporate finance? Smaller firms outside the top 100 also had a high number interested. It certainly indicates interesting times ahead, and firms need to be clear on their strategy and direction.”
The survey report added: “There are obvious synergies that can be found in many instances, for example combining patent attorneys and law firms, or conveyancing practices with estate agencies, cross-selling services to a wider pool of clients, and providing a ‘one-stop shop’ for clients’ needs, especially on a global basis. Yet making it a reality in practice will be easier said than done.”
The survey found more generally that 41% of the top 25 firms plan to make acquisitions over the next year, compared to 20% of all firms surveyed. Looking ahead three years, almost 60% of respondents expect to take part in M&A activity, although most envisage acquiring a smaller firm. “Of course not everyone can achieve their growth forecasts by acquiring smaller firms,” said the report.
Nearly a third of firms had merged or acquired in the last three years, and the survey found one group who found no surprises from the process, while the other indicated the precise opposite.
Asked what they wished they had known beforehand, comments included: “the chaos that would ensue”, “how duff the duffers are”, “how difficult integration is” and “how to secure brand value from the smaller firm”.
The report said: “A simple message emerges – there is a lot more to a merger than meets the eye.”