It's tough being a mid-tier firm these days. Things are getting pretty crowded outside the top and bottom end of the market, with client preferences increasingly polarised between full-service global firms and niche outfits capable of specialist service delivery.

According to research by Deloitte, results from the six years to the end of March 2014 show fees per fee earner growth of 18% among the top 10 firms, whereas firms ranked 26-50 reported growth of only 1%.

Not that you'd know market conditions were against top 40 firm Hill Dickinson from the impressive entrance to the firm's offices in Broadgate Tower in the City of London.

Managing partner Peter Jackson's firm has occupied 32,000 sq ft and three floors at the Bishopsgate address since moving from nearby Irongate House last summer, a statement of the firm's intent not to back down from the competition.

"We knew we weren't going to be long for [Irongate House], so we didn't really spend any money on upgrading it," says Jackson. "The feedback we've got from clients on [Broadgate Tower] is that they find it really useful without being overly ostentatious."

Jackson acknowledges, however, that the firm has a testing time ahead. Hill Dickinson's revenue dipped by 1% in 2013-14, against a 3% rise in profit per equity partner (PEP) from £264,000 to £272,000.

"We are a middle market law firm," Jackson says. "Can we remain in that position for the foreseeable future? We are asking ourselves that now."

But if same old same old is the road to ruin, what's the strategy for a firm like Hill Dickinson to make sure it avoids ravaged by the fierce competition in the mid-tier of the legal market?

The Liverpool headquartered firm, under Jackson's leadership, was planning to apply for an alternative business structure (ABS) from the Solicitors Regulation Authority in 2012-13. The move would have allowed the firm to engage in joint ventures to provide non-legal services or to bolster its existing practices through additional external investments. It's a strategy that peers Kennedys and Weightmans have both pursued.

Jackson, however, says that the prospect of an ABS has now been taken off the table after consulting with numerous clients, having decided it would only work in limited parts of the business such as the volume insurance arm.

"We haven't pursued the ABS idea. At the moment we haven't got plans to do so," he says. "The jury is still out on [previous firms who have gone for an ABS]. You've not seen a mass follow to market."

Nor does Jackson seem keen to laden Hill Dickinson with a mountain of debt or radically alter the mix of work the firm does. Of all the options, he concludes, "acquisition and merger would be the one we would look at."

"For firms [ranked] 20-50, you've got a lot doing the same stuff," he says, predicting more general consolidation in the mid-tier market over the coming years. He insists, however, that one of the firms in that band would not necessarily be his merger target.

He says he is as open to the idea of bolting on a smaller, more specialist firm to the Hill Dickinson family as he is to acquiring another firm of similar size with a similar mix of work across the marine, health, insurance and commercial sectors.

Asked whether or not the merger would happen before his third four year term ends in 2018, Jackson seems hopeful a deal will have been signed, sealed and delivered well ahead of that milestone.

"I don't think any of us firms in that space have until 2018 to think about it," he says.

Unfortunately, as is the case with many firms of comparable size, the options outside of consolidation don't look pretty. The upside of a merger can be huge, but there's often a worry that it is seen as 'least bad' option for firms that, for whatever reason, can't generate the kind of relentless expansion needed to retain their spot in the mid-tier.

"Assuming we don't do a major merger we need to have grown to something like £150m [by 2018]," Jackson believes.

With revenue for 2013-14 coming in at £111.6m, that means the firm would need to grow at an average of nearly 8% a year for the next four years to hit the £150m mark by the end of the 2018 financial year.

That's a growth rate few managing partners would be willing to bet their firm on. Even if the firm finds a whole new raft of ways to become more efficient – it started the process of implementing a new case management system last year and is pushing more work down to its own paralegals – there's no guarantee that will be enough to stay put or climb the rankings.

That being said, Hill Dickinson remains a strong brand. Even when confined to volume or niche work, the firm retains a decent client roster with the likes of RBS, Tesco, Stobart Group, Metro Bank and BP.

2015 couldn't have started much better either with a role advising Irish building supplies group CRH on its €6.5bn (£4.9bn) acquisition of assets from Lafarge and Holcim ahead of the two cement giants' planned mega-merger.

Jackson's attention needs to now turn to his own merger if the firm wants to continue to build on that success.