Happy bloody New Year from BDO Stoy Hayward, which is predicting that an astonishing 15 per cent of UK law firms could be on the brink of going out of business. See story.
While all and sundry are easing their hangovers with analysts’ predictions that the M&A boom will continue, it’s been left to the accountants to cast a word of caution. Funny that.
This is no post-Carter scare for small criminal firms either. BDO is concerned that changes to banks’ lending strategies will have a massive effect on law firms large and small.
BDO reckons that these policy changes will result in at least (yes, you read that right) 1,500 law firms needing to merge or be wound up in the next few years.
And it gets worse!
Even if your (badly run) law firm gets lucky and is saved by merger it could still go horribly wrong.
Cheery BDO partner David Miles comments: “We would urge any distressed law firm not to be too rash and hump at the first opportunity of a merger. Quick defensive mergers could lead to lasting regrets long after the ink on the contract has dried.”
Merger mayhem looks set to continue. We’ve already welcomed Reed Smith Richards Butler and DWF-Ricksons in 2007 – but you’ve been warned. Watch this space for the cracks to appear.
Steve Hoare, news editor