McKinsey's 10 Principles for Successful Law Firm Mergers
Partners from the global consultancy take lessons from advising corporations and other professional services firms on mergers, bringing tips for how law firms can have a better strategic approach to growth.
February 23, 2023 at 09:06 AM
7 minute read
Market forces have led to the consolidation of a number of professional services sectors. In accounting, for example, the Big Four account for more than 60% of the U.S. market. There is good reason for this: research has shown that across industries, organizations with a systematic M&A strategy delivered better shareholder returns. Organizations that relied solely on organic growth, on the other hand, performed relatively poorly.
Legal services are not immune to this trend: consolidation is well under way, albeit not to the same extent as in other sectors. In 2017, the largest five law firms by revenue accounted for 8% of the American Lawyer 200 revenue pool. By the end of 2021, that figure had risen to 14%.
If scale or scope is a strategy of choice, mergers and acquisitions (M&A) can play an important role. M&A can help law firms strengthen existing practices, build new ones, or enter new geographies.
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