Law Firm Mergers: Pros and Cons
Last year, a huge three-way merger was announced between CMS UK, Nabarro and Olswang. Most of the future trainees at these firms studying the LPC seemed pretty excited about the merger and the prospect of working at an even bigger law firm. Here are some pros and cons of law firm mergers.
Law Firm Mergers: Pros
1. Bigger firms could be more competitive
A larger firm may mean more clients, more work and a better pool of resources, especially for those coming from the smaller firms. In the case of the CMS merger, it is intended that the newer and larger law firm can start to compete with silver circle or even magic circle firms. In addition, it makes it easier to fight off competition from other professional legal services firms, such as PWC, who are trying to expand into the legal sector.
2. More international scope
Mergers allow firms greater access to international and emerging markets. For the smaller firms, mergers can mean more offices around the world and more diversity in both the clients and lawyers you will work with.
3. Opportunities to defer your training contract
While to some this may be a con, on the recent merger, Nabarro is offering future joiners £10,000 to defer their training contract for a year. A lot of my friends are using this money to develop their life skills by volunteering abroad or just travelling for a few months. Seems like a win-win situation to me!
4. More colleagues
This could be seen in a positive or negative light. However, a bigger law firm means you’ll have more people around you to share ideas and a bigger pool of people to make friends with!
Law Firm Mergers: Cons
1. Lost Jobs
Ultimately jobs will be lost as the firms start to integrate and streamline their operations.
This can result in an uncertain culture for lawyers and support staff, as the transition period doesn’t create the best work environment.
2. Change of culture
Depending on the size of the firms that are merging, there could be a culture change. However, compatible firms usually try to merge together to make the transition easier. In other cases, the bigger firm may push its culture onto the other(s). Mergers can be incredibly disruptive as they are a long process requiring commitment from all parties, so it can take a lot of time to fully integrate the firms.
Overall, law firms do not take mergers lightly simply because of the time and resources required to make them work. Many merger talks will fall through simply because agreements cannot be made between the firms. As a result, when mergers are undertaken, usually the firms are a good fit and all parties will be committed to making the merger a success.
Words: Lauren Tai