Page 8 - 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 8 info@wilkinsonread.co.uk

As John Woolridge of Windsor Partners insurance brokers says, “firms are terrified of the likes of

Tesco and Co-op, and smaller firms have most to worry about.” Consolidation has been widely

predicted.

While one respondent believes that only 20 per cent of competing firms in the mid-market will

survive, most put the number at between 60 and 90 per cent – but this of course still suggests that

anything from 10 per cent to 40 per cent of currently independent firms could have lost their

independence in five years’ time.

Christopher McKenna, director of the Novak Druce Centre for Professional Service Firms at Oxford

University’s Saïd Business School, believes that the question is twofold. “To what extent will larger

organisations start selling commoditised services, and how much aggregation will there be of smaller

firms? The middle market is where the potential problem lies – medium-sized businesses offering a

local service in a market with national scope.”

A number of respondents feel that smaller firms will not be an attractive market for investors, and

therefore consolidation will be limited to mergers, acquisitions by existing firms, and unsuccessful

firms closing their doors. As Chris Marston, Head of Professional Practices at Lloyds TSB Commercial,

says, “there is unlikely to be a ‘Big Bang’”. Two managing partners specifically cited the prospect of

firms going out of business as being far more likely than mergers – perhaps due to cultural

differences between firms.

As the Finance Director of a medium-sized firm based in the north-west told us, he has seen a

distinct trend of competing firms going out of business, but also noted a significant move towards

defensive mergers.

Other interviewees see a distinction not only in size of firm, but also in practice area. Steve Penny,

Managing Partner of JCP Solicitors based in Swansea, believes that – although the effects remain an

Page 8 - Beyond ABS

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

« Previous Page Table of Contents Next Page »