Mid-market merger mania? Maybe next year

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  • Which law firms cannot be improved by having a greater market profile, access to more clients and being able to apply economies of scale to its departments?

    There are nuances between law firms, but on the whole, most law firms are offering very similar services. Therefore it seems sensible to join forces with other well run firms.

    However only a few law firms are well run. The badly run law firms (eg low profits, too many partners etc) will struggle to merge, because their problems will be discovered during the due diligence stage.

    So what you have is an acceleration of the market. The best firms can pick the best merger partners and therefore get better. The bad firms get left behind.

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  • Law is like every other industry, there are economies of scale, and globalisation and the increasing importance of IT are making them ever more significant.

    Consolidation of the market is inevitable and at this moment there is very little to be gained from sitting on the sidelines, it likely just means fewer options and less chance to maximise influence in the creation of market leading firms.

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  • Apparently 75% of M&A deals don't make enough money in their first seven years to cover the purchase costs.
    Often the problem is that the purchasing company sticks to its old formula and doesn't make the most of what it has just acquired. The same problem may dog these mergers.
    Take DWF's purchase of Crutes (and maybe Cobbetts). The moment the DWF logo goes up, the fear is that people will forget what made these firms attractive in the first place. Will the Carlisle office be allowed to prosper? Will niche teams be encouraged?

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  • DWF Flag?

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