Over the past four years, the ‘perfect storm’ of deregulation and economic downturn has crystallised issues for managing partners. Having drawn comfort from the belief that they had a strong and profitable business, albeit protected by regulatory barriers and driven by an exceptional period of bull market activity, firms have come back down to earth with a deafening thud.
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” Winston Churchill
Big strategic plays are de rigueur! The first few weeks of 2012 have seen merger announcements aplenty, significant external investment in UK law firms, the launch of ABS models that will change parts of the market forever and a renewed appetite for international expansion. These are the headline grabbers, but what about the majority of firms not in the media spotlight? Are they on the cusp of making their own announcements or simply stunned by what they see unfolding around them.
Law firm mergers are fascinating things. They mix high drama and Greek tragedy as courting parties – initially with uncharacteristic coyness and latterly with a disregard to sensible decision making – waltz towards ultimate consummation. However, much of the discussion is tangential to the real issues at play.