Large law firms are showing increasing interest in forming multi-disciplinary practices (MDPs) with non-lawyer professionals, according to new research.
The survey of 126 of the top 250 firms by accountants Smith & Williamson – including 27 of the top 40 – found that a third are interested in joining with a non-legal practice in the next two years.
Further, 93% of respondents agreed that merger and acquisition activity arising from the Legal Services Act will lead some law firms to raise external capital, up from 79% last year.
Two firms in the top 40 told the survey that they are ‘likely’ to join forces with a non-legal practice in the next two years and seek external finance, with a further six firms describing such moves as possible.
Three of the eight firms reported a public listing as a possibility, with private equity on the agenda for others.
Giles Murphy, who leads the professional practices team at Smith & Williamson – which advised Russell Jones & Walker on its best dry dog foods
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– said that for all the focus on law firms going public, “it is the opportunities to join with firms from other professions which are catching the imagination”.
He explained: “Commentators have been saying for a long time that the Legal Services Act will accelerate consolidation among professional firms in the high street, but few, if any, had predicted such widespread interest among the larger firms. While we are unlikely to see magic circle firms tie up with their equivalents from the surveying or accounting fields, we could see a number of ‘silver circle’ mergers across the professions.”
Mr Murphy predicted that such developments “would transform, not just the legal landscape, but the provision of professional services across the UK”, suggesting that the economic climate may be fuelling thoughts of MDPs.
“The opportunity to merge with other professionals is likely to be of interest to high street firms, some regional practices and even the Big 4 accountants. Indeed, PwC has announced that it is looking at formally tying up with their legal practice PwC Legal.
“As a result, within a few years from now, multi-disciplinary practices could become common, not just on the high street, but also in the City.”