Recovery led to 2013 surge in legal mergers
THE NUMBER of mergers in the UK’s legal sector has jumped by nearly two thirds in the past year, with more than three times as many recorded in 2013 than in 2009, according to figures released this morning.
The data, produced by accountancy firm Wilkins Kennedy, revealed that there were 385 mergers in the sector during 2013, as businesses became more confident in the recent economic recovery. Just a year earlier, in 2012,, there were only 234 mergers.
Four years previously, during the post-crisis recession, there were only 146 mergers between law firms, fewer than a third of the result last year.
The deals included Norton Rose’s large merger with US group Fulbright and Jaworski, which formed Norton Rose Fulbright just over a year ago.
“Whilst some firms need to find a white knight quickly in order to stave off potential financial collapse, others are turning to mergers to deliver that boost in profitability that a merger will achieve from cost savings. Economies of scale from a merger – especially where the merged firms can better utilise staffing levels – can be substantial,” said Tommy White of Wilkins Kennedy.
He added: “The drive for consolidation appears to be more, not less, pressing as we leave recession behind. Yes, it’s often about immediate survival, but it’s also about securing on-going profitability and competitiveness.”