Page 12 - Beyond ABS

This is a SEO version of Beyond ABS. Click here to view full version

« Previous Page Table of Contents Next Page »

www.wilkinsonread.co.uk 12 info@wilkinsonread.co.uk

says, “lawyers are reluctant to give up their equity, even to other lawyers, but this may change if

they need to recapitalise their firms.”

Others, however, feel that aggregation of smaller firms and the entrance of new, low-cost

competitors offering commoditised services is inevitable. Interestingly, most partners believe that

this will have little impact on their own firms. There is, again, a contradiction here between how

partners feel the market will change, and how they believe their own firm will be affected. Whether

this is a question of confidence or complacency is an open question.

Christopher McKenna’s view is that external capital will indeed be most influential at the bottom of

the market. He believes that the top firms do not need the cash, as they already have good access to

capital markets, and that there will be some limited investment in the mid-market. “At the lowest

level, external capital will be useful. People at the five to ten partner level will want to sell out, and

will not be attractive on their own. This will only work with economies of scale behind it – with

centralised back-offices and lawyers, and uniform processes.”

Barry Wilkinson agrees, although he believes that the impact on the middle market will be more

significant (this rather depends on the definition of ‘middle market’). “It has happened in almost all

other deregulated or fragmented markets. Most firms of accountants are still partnerships or LLPs,

but their focus is on both profits and growth. In the long-term, those who reinvest will win at the

expense of rival income vehicles. Of course, the most successful firms will do both.”

Page 12 - Beyond ABS

This is a SEO version of Beyond ABS. Click here to view full version

« Previous Page Table of Contents Next Page »