A slight slowdown in law firm mergers in the UK

This follows 122 mergers in 2022, reflecting a sustained recovery from a ten-year low 99 mergers in 2021

Factors behind the trend

The increasing number of mergers is partly due to this consolidation companiesoften supported by private capital (PE)wanting to acquire other practices. These firms seek to grow by employing attorneys who earn retainers while controlling costs. Considerable PE-backed mergers in 2024 min Fletchers Group (property Sun’s European partners) acquiring Serious Injury Law AND Solaris Law (property Elliott Management) purchase Shoosmiths’ business-to-business data recovery division.

Ian Johnson, partner at Hazlewoods, explains: “Law firm mergers are another strong year, driven by consolidation firms and PE-backed platforms looking for acquisitions to drive growth.” It also notes that pandemic-related uncertainty in 2021 left many high-quality acquisition targets pending, which have since been capitalized on.

The role of technology and artificial intelligence

The sharp increase in mergers may also be influenced by the growing demand for Artificial intelligence and legal technologies investments. Larger companies, wanting to remain competitive, invest in these tools that require significant capital. Smaller companies may seek to merge with larger entities to afford such investments.

Johnson adds: “As demand for AI in the legal sector increases, many smaller firms may decide that merging with larger firms is the only viable way to fund the necessary investments.” This trend is expected to drive further market consolidation in 2024.

Notable recent mergers

Significant mergers this year include: Radcliffe LeBrasseur merger with Truants IN October 2023 AND Mishcon de Reya joining forces with Taylor Vinters IN January 2023. Important cross-border merger in May 2024 saw Magic circle reliable Allen and Overy connect with an American law firm Shearman and Sterling.

As the legal profession increasingly embraces technology and consolidation strategies, the pace of mergers shows no signs of slowing down. Hazlewoods expects this trend to continue as the industry continues to address the challenges and opportunities presented by technological advances.