Over the past 12 months, we have seen the most extreme market conditions any of us could have expected.
The challenges facing law firms have never been higher, so many may be considering the opportunities to acquire or merge or indeed, at the other end of the scale, the opportunity to merge, sell or retire.
Here’s our top 10 reasons why we think every law firm should be seriously asking themselves the ‘should I merge, buy, sell, recruit or stick’ question.
- Becoming part of a much larger organisation provides resilience. A merger presents a plethora of opportunities from streamlining processes, reducing costs and increasing depth, breadth and reach of a law firm to improved client service, a stronger team of legal experts and increased profile.
- Never before has there been such a dynamic market for recruitment in professional services. If your firm has liquidity, ambition and a clear conscience, you may well be able to attract surprisingly strong people who feel more culturally aligned with your business than their current one.
- How much energy do you have to manage your firm back to its financial wellbeing pre-Covid? The burdens of owner-managed law practices have grown hugely in recent years and there is no sign of this abating. The increasing stresses and strains of the current market makes an increasingly attractive argument for selling up sooner than later.
- It is often said that more fortunes are made in times of trouble than at any other time. This is because we are a risk-averse species and those of us brave enough to act while others sit on their hands often get ahead of the game and steal a march on the market as a whole. Recent surveys indicate far more firms will be standing still than moving forward which means there is less competition for the nuggets and the early moving can bring greater benefits.
- Most firms need to renew PII in October. Most mergers will take a minimum of six months so the window before this year’s renewal is tight.
- The recession is likely to hit the legal market hard and provincial town firms are feeling the brunt. With owners typically being in their 60’s, how much time are people willing to invest into standing still as a good outcome rather than bring retirement forward?
- As your competitors struggle in the current and hopefully soon post-Covid economy, there is a drive to consolidation which is in its early days. Once this has had time to make significant ground, investors turn their eyes to larger and larger targets, so the window of opportunity for smaller firms to find good deals is already closing.
- Succession by internal buyers has been getting harder and harder for more than ten years. Add in the combined impacts of social changes and recession and there are likely to be fewer and fewer people willing and able to purchase equity from the incumbents.
- Few if any solicitors enjoy being COLP or COFA and the challenges of remote working mean this is an increasingly tricky role to balance with your essential client work. Combining with a firm that has an infrastructure to deal with this means you will be able to refocus on clients at the same time as removing the risk of a notifiable incident occurring on your watch.
- How people feel about the way in which their firm responded to the challenges in the last 12 months is being felt strongly by staff in all law firms. In particular, if the partners shared the pain or piled it all onto employees by way of furlough, redundancies and pay cuts. The social positioning of organisations is more important today than ever before. In short, there are lots of good lawyers looking for more socially responsible law firms as their next ‘home’.
These are just some of the reasons why your firm may benefit from a chat with us to understand and then exploit the opportunities in the market and to ensure that you and your firm are best placed going forward.
So – are you going to merge, buy, sell, recruit or stick?
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