Mergers on the increase: small and medium-sized firms are struggling to cope with a lack of growth
updated on 23 August 2013
Small and medium-sized firms are increasingly turning to mergers as a way of coping with a lack of growth, research has suggested.
A benchmarking study by MHA - an association of nine accountancy and business advice firms - found that some firms have struggled to maintain or increase their incomes following the onset of the recession. As reported by Legal Futures, changes to the structure of personal injury and legal aid practices have also contributed to stagnant income levels.
The study stated: "While trying to achieve improved profitability in a 'flat' economic climate will remain a challenge for all professional practices, we at MHA believe the legal sector will continue to remain at a distinct disadvantage due to the increase competition resulting from deregulation, added compliance burdens and sector specific issues (relating to legal aid, personal injury referral fees and a reduction in PII providers amongst others). Therefore, looking for continued improvement in the management of lock-up, employment costs and fee income growth at per partner level must remain the focus for law firms. The consideration of mergers as a means to an end will likely become more pronounced."
