2018: Five more UK firms to fold

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  • 80% of law firms (ILTA survey): likely to merge due to market liberalisation & tech advances. often the ability to sell or indeed merge a firm comes down to the agility of the critical business systems that the companies use.

    My view is that at least 5 of the current UK Top 100 will go bust, with all the hullabaloo of such events: bearing in mind what has happened in the last few years that is not an earth-shaking prediction. The reason is bad financial management, and entirely avoidable.

    More importantly (perhaps) I said that at least 30 of the current Top 100 names will disappear. Some will be sensible, orderly, happy mergers, properly planned and sought. However most will lose the ability to stay independent because they have failed to adapt to changing circumstances (see Darwin's theory in this string): in the end the choices run out and they have no alternative but to become someone else's lunch. However gently it may be described, this was NOT the outcome envisaged in the original strategy!

    The comments in this interesting string identify the main reasons. Firms lose the ability to compete in a harsher market because a) the leaders do not have the experience and/or vision and/or authority to initiate and implement change; and b) the partners fail to ensure they have leaders of the right calibre and/or fail to support the measures proposed because they don't understand the competitive reality, and/or they feel personally threatened by it all. I personally know several Managing Partners who have just given up and walked away because making anything happen in their firm is like stirring treacle. One of the key competitive advantages of the new types ofcompetitor joining the market is their culture of decision and the ability to act quickly.

    Whether the predictions are accurate or not (hold me to account in 2018) the momentum of change in the legal market is unstoppable. The space will look very different. Winners will win big, the losers will just fade away.

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