There are many reasons why a law firm may consider a merger. Mergers can be a useful way of expanding into different practice areas or locations, to increase the operational capacity and efficiency of the firm, increase its revenue and market growth, or for succession planning purposes.
In the latest episode of our Ten-Minute Talks series, Partner Zulon Begum and Managing Partner Clare Murray discuss all things law firm merger, in particular:
- Why do law firms typically merge?
- How can firms effectively plan for a merger?
- Does money typically change hands during the process?
- What if some of your partners don’t want to be involved?
- What does success look like?
The three key factors firms need to consider when planning a merger are:
- Strategy: Firms should have a solid strategy in place, giving careful consideration as to why they wish to merge, in order to help identify the right merger partner(s) to fulfil their specific objectives.
- Constitutional Review: A review of the firm’s LLP agreement is crucial to understanding its constitutional processes, for example, whether unanimous consent is needed in order to affect a merger.
- Firm Due Diligence: It is also imperative to ensure that the firm has undertaken its own due diligence, including finding out if there are any historical financial roadblocks, such as high PII or lease costs.
If you have any questions arising from this recording or would like to discuss law firm or other professional services mergers, or for any other partnership law issues, please contact Partner Zulon Begum or Managing Partner Clare Murray.
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