2015 could be a challenging time for UK legal businesses. The IMF has revised the Eurozone growth forecast from 1.2% growth to minus 2%. The slump in growth with supply of services outstripping demand and greater competition from accountants, alternative business structures (ABS) and online services, may mean that UK law businesses are looking at mergers to spread costs and de-risk and hopefully increase turnover. It is predicted that 2015 could be the year of UK law firms consolidating. Fortune favours the Brave and Failure favours the half hearted.
Kirk (Senior Partner McGrigors) starts with his take on why so many law firm mergers have happened in recent years. He first lists some of the key reasons why law firms merge at any time: to grow their business, to develop new practice areas, and to cut operating costs through economies of scale, which allows them to keep clients happy by providing services to them at a competitive price. The last reason, Kirk feels, is a particular driver of law firm merger activity in the current economic climate: Clients are saying that they want high-quality service and that they want the skills we can bring to them - but they don't want to pay any more than a certain amount for it.