Other mergers between U.K. firms will surely follow. Jomati's Williams predicts that in the medium term, as much as 40 percent of the U.K. top 100 could merge. What has up until now been a steady trickle of law firm mergers is fast becoming a flood.
"The legal market is still hugely fragmented, but we're now at a stage where we're going to see a significant shift toward consolidation and more strategic thinking," says Huron Consulting Group managing director Alan Hodgart, who advised Australian firm Deacons on its merger with Norton Rose. Dembovsky believes that successful law firms will increasingly fit into one of two categories: small, niche players that focus on a narrow area of the market; or larger, full-service firms that are able to service clients across multiple practices and jurisdictionsa prediction that is likely just as applicable to the U.S. and global legal markets, where many midsize firms face a similar outlook.
Still, it's important not to get too carried away. Law firm combinations are notoriously tricky things to get right, and as such suffer a high failure rate. The already complex task of finding the right merger partner will become even more challenging as the market continues to consolidate and the pool of available firms diminishes. Even successful tie-ups will have to endure potentially disruptive periods of integration.
But with U.K. law firms now able to accept external equity investment, there's a real sense that the country's legal landscape is irrevocably changing. And as the weight of merger momentum continues to build, many firms may decide they have little choice but to join the partyor risk being left behind.