2015 has already been an active year for law firm mergers. Most notably January saw the announcement of a proposed merger between Dentons and Chinese firm Dacheng to create the world’s largest firm of more than 6,600 lawyers.
Last month I was asked to speak on panel at the launch event of a report by Byfield, a communications consultancy, into mergers in the legal sector. I was struck by a fundamental disconnect between two consensus views: that there will be both a lot more mergers in the legal sector in the coming two years (95% of managing partners predict further consolidation) and that most law firm mergers fail to realise the full value anticipated at the outset of the deal.
This suggests that many mergers over the coming years will be defensive rather than strategic – firms see merger as an opportunity to stave off a long-term trend in decreasing profitability. It also suggests that firms struggle with post-merger integration: once a deal has been signed it can take a lot of time and effort to realise the benefits of a merger.
In the video below I offer some thought on Byfield’s report, and in this guest blog I highlight three moments that make a successful law firm merger.