Is there an alternative to having to merge when some partners want to retire and others wish to stay on, but are worried about taking on too much responsibility and liability? The traditional way of dealing with this situation is to merge with a local firm or try to get another solicitor to buy in.
But one of the biggest issues with local mergers is having to get into bed with a firm purely because they are local rather than there being strong business case. Often there are property issues and more often than that cultural problems.
Getting a lateral Hire to join and then buy into the equity is also difficult because you don’t know them and equity partnership is like marriage, easy to get into but difficult and expensive to get out of.
So this common situation is a problem, but there is now a third way:
We are acting for a law firm who have the full range of support departments, HR, IT, compliance, management, finance etc who are actively seeking to make investments in good local firms. Our client will buy out the exiting partners and bring their management and business skills to the firm allowing the remaining partners to concentrate on the law. In many ways this is the perfect combination of skills, lawyers doing the law but with all the day to day running of a business and compliance elements left to a team of experts who understand how law firms tick.
These firms keep their brands ensuring that clients are not put off like many were with the QS brand and the firms become more successful from being run properly, all of which increases profits for everyone involved. Finally of course, with a corporate partner on board, the existing partners never have to worry about their succession or retirement.
This might seem an alien concept but such activity is commonplace in the commercial world and the firms we are currently in discussions with are very enthusiastic once the model is explained. It’s not for everyone, but if you think it might be for you please get in touch.
The author of this article is Andrew Roberts of Ampersand Legal. Andrew can be contacted at andrew@ampersandlegal.co.uk or 07956 961404. Other members of ALFMA can be contacted here.