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Consolidation and the Forces Transforming the Legal Market

The driving force behind this project has been the realisation that many partners in many

independent SME law firms are, to put it mildly, concerned about the prospects for retaining their

firm’s independence over the next three to five years.

Many mid-sized law firms are becoming increasingly concerned, but not necessarily by competition

from new, low-cost competitors offering commoditised services. They are a threat, but it is what is

actually happening on the firm’s doorstep – what their competitors are doing at present – that is

often of greatest concern. Many are just realising that firms are starting to seek out and identify

potential merger or takeover targets. If the firm is not in a position of health then the focus should

be on what can be done to strengthen its competitive position – what makes the firm different, or

what could make them attractive to potential takeovers.

However, all respondents were

quick to assert that this is still an

unknown quantity. Our analysis of

the three forces shaping the

development of the market –

deregulation; globalisation and

low-cost competition; and

technology – met with mixed

responses. While fifty per cent of respondents believe that deregulation, globalisation and low-cost

competition will have a significant or transformative impact on their market, 63 per cent believe that

there will be either no impact or only a minor impact on their own firm (see Chart 1).

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Market Firm

Significant / Transformative

None / Minor

Chart 1 – Impact of Deregulation, Globalisation and Low-Cost Competition

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