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Clyde & Co is a global firm that offers advisory and contentious work in the insurance, aviation, energy, marine and natural resources sectors. BLM is a UK and Ireland-based insurance and commercial risk law firm. BLM is a casualty insurance specialist practice. The firms will merge to be called Clyde & Co with combined revenue of £700 million, over 5,000 in over 60 cities.
Examples of law firm mergers:
Mergers are acquisitions in which a larger law firm tends to buy one or more small law firms but merge their clients, sectors, values and more. In this LCN blog post, I will look at the many benefits of a merger.
Read this LCN Feature: ‘Your guide to the legal profession 2021-22’ for headline-grabbing cases and mergers in the legal profession during 2021 and this year so far.
The ability to improve your client service is central to any merger opportunity. Ultimately, clients are always looking for opportunities to keep their costs low whilst receiving a high-quality service. This can be a cost-effective solution for clients. Plus, there will be a smaller panel of solicitors for clients to choose from. In the case of the Clyde & Co merger, this can offer clients a more focused, comprehensive service.
Read this LCN Feature: ‘A guide to law firm mergers’ to find out some of the factors that lead firms to merge.
Culture and systems
Perhaps the top priority in all merger discussions is the culture. Culture is often the first consideration a law firm must take when deciding if a merger with another law firm in order to understand the impact the merger will have on the law firm’s image in the long term. So, aligning a firm’s values and approaches with another firm is a huge benefit to the client.
A careful and precise plan to merge two or more law firms will affect the law firms’ ability to retain current staff by empowering and engaging staff. Another critical ingredient for a successful law firm merger is the integration of operating systems, corporate governance, and processes. Provided that they are done effectively, they can fill gaps in the systems and approaches used by the law firms, while gaining additional capabilities in the digital sphere, working models and reporting systems.
Sector and market challenges
A major factor which encourages a law firm to merge with another is that they will be able to expand their practice area and the sector in which they specialise. They will also be more responsive to the needs of the legal market and the market in which clients operate.
For a lot of firms, this can be the drive they need to reach international markets and clients. This is the case for BLM – by merging with Clyde & Co, the merger offers easier access to the global market in which Clyde & Co already operates.
A merger is an opportunity to absorb a competitor. Similarly, to Clyde & Co, BLM practises in similar practice areas. A merger has many advantages because it allows you to join the competition to form a bigger company and increase a brand’s visibility.
Therefore, a merger can boost a firm's recognition in the wider market. Typically, a law firm merger can occur in response to the changing needs of the sector in which they serve to consolidate the market, for example in insurance law. On the other hand, it’s an effective way for law firms to offer more practice areas and expand the law firm’s breadth of service.
Check out LawCareers.Net Solicitor’s Practice Area Profile on insurance law.
Why should I care?
Law firm mergers are a big part of understanding commercial awareness. If a firm you’re interested in applying to undertakes a merge, it impacts your trainee experience. Understanding a law firm's merger is key to understanding the law firm’s business strategy and future goals.
For you and your career development, understanding the benefits of a law firm merger is a way of learning how to drive change and introduce new clients. It can also introduce another practice area(s) into your firm which can develop a strategy for the law firm’s future growth.
Want to sharpen your commercial awareness? Visit our commercial awareness hub, take part in the LCN commercial quiz on Twitter on Mondays, digest the Commercial Question on Tuesdays and read the Commercial news round-up on Thursdays.