External pressures are making life very difficult for some law firms. The current economic climate, declining profitability, increased professional indemnity costs and the greater burden of new regulations are all taking their toll. As a result, some firms are being forced to consider how to ensure the survival of their business. One option is a defensive merger.
Benefits of a merger typically include an increase in the size of the firm. This can mean greater financial resources to cover the additional costs that may be necessary for the business to succeed in the current environment. For example, many firms are introducing new internal procedures to ensure they comply with anti-money laundering regulations and the requirements of the new Proceeds of Crime legislation. Smaller firms may find it difficult to afford the necessary support structures which provide adequate procedures.
