The SRA has been consulting on proposals that law firm mergers and acquisitions be subject to a new requirement to notify the SRA in advance. They note this is part of the ongoing review of steps they can take to better protect client money. Clearly it is also due to the directions issued to the SRA by the Legal Services Board to avoid a repeat of regulatory failures following Axiom Ince.
This would be a notification process, not an approval process, which is more workable for firms, but nevertheless we would expect this to be a significant additional feature in a law firm M&A timetable. The consultation paper proposes that notification is made when heads of terms are agreed or 30 days before completion.
The SRA is seeking views on requiring notification of the following information in advance of a merger or acquisition:
- name of the acquiring and target firm
- turnover of the acquiring and target firm
- the value of client money held by the acquiring and target firms
- a breakdown of the areas of law practised by the acquiring and target firms
- expected completion date
- the number of acquisitions by the acquiring and target firms within the last 24 months, and whether this is the acquiring firm’s first acquisition
- an indication of the structure after the proposed merger or acquisition i.e. whether it is likely to be:
- a single standalone firm (no parent, subsidiaries, or group)
- part of a simple group (one parent or a small number of related entities)
- part of a complex group (multiple entities, investors, or cross-business activities).
Our detailed response made the following key points.
- Clarity: Firms must have clarity on when they should notify the SRA of M&A, what they should notify, who needs to notify and the extent of any obligation to update notifications if/when information changes.
- Timing: Notification at the point at which heads of terms are agreed is too early. Signing of the M&A documents is the first real point at which there is relative certainty that the merger/acquisition will proceed.
- Information: The consultation proposes that a large volume of information is required to be notified, which will be a drain on firms’ resources at an already busy time. There must be a clear rationale for each piece of requested information and the SRA must be able to process that information effectively to address the risks it is seeking to address. If the SRA will not be using the information effectively, firms should not be required to spend time collating and submitting detailed data.
- Confidentiality: Law firm M&A activity is kept highly confidential, and for good reason. Clients, staff and partners can get spooked and undermine a potential transaction and the firms’ continuing stability.
- Opportunity: The SRA should use these changes to address challenges firms face during law firm M&A, such as how to manage conflicts and client files where clients are uncontactable.
You can read our comments submitted in response to the consultation here.
The SRA’s consultation paper can be found here. The deadline for responses was 17 August 2026.
If you would like to discuss any of the themes or issues raised by this consultation or law firm M&A more generally, please contact Partners Corinne Staves or Zulon Begum.
Corinne Staves is recognised by Legal 500 UK 2026 as “Leading Partner” in the area of Partnership law: “Corinne Staves stands out for her knowledge and experience. She is always available to talk things through in a helpful manner.”
Zulon Begum is ranked Band 1 by Chambers and Partners UK 2026 for Partnership: Non-contentious: “Zulon is extremely responsive and has a solid handle on the challenges of pressure and in the regulatory environment that we have been dealing with.” ”She is calm and confident and gives the sense and feeling of really knowing the topic and the market, which is very important.”
CM Murray LLP is ranked Tier 1 for Partnership by Legal 500 2026: “This practice is unique due to its very specific focus on partnership matters and related transactions.”
