Based on the facts from last year, here are a few predictions being made for law firm mergers for 2014. In 2013, two major law firms suffered terribly. These firms had to cut their annual budget which in turn cost the partners in losing their fair share of money. When a firm grows, its partners enjoy extra income which is their fair share. But when the firm collapses or faces a downfall, everyone has to pay the price.
With the collapse of two major law firms, 2013 did not seem to end too well for businesses in this category. This also created an air of disappointment amongst other firms who were in a partnership or were planning to get in one. There’s a possibility of failure for more than two firms. This adds up to the statement of 2013 not being a successful year for law firm mergers. But 2014 is a new year and hopes are high that history will not repeat itself.
The dimensions of the corporate sector are shifting every year and predicting merger success and failure rates is nothing too out of the box. When there is a competitive market and the economic conditions are not doing too well, there is a higher chance of failure for many law firms.
The people who don’t like to pay the price for the economic or firm’s conditions will most probably move out as lateral partners. This will take place in the starting of the year because many firms distribute a large amount of the prior year’s profits within this first portion of the year. This will result in lateral partner moves and the planning phase for this takes place in the latter part of the previous year because the process can take months.
Another important prediction is that in spite of some unsuccessful law firm mergers, these mergers will continue to accelerate. Merging with another firm expands your platform, increases your total revenue, and shows the world that you’re a creative leader. The law firms that were unsuccessful in the merger need to prove it to the world that this is not the end for them, and some other firms would want to change this perception of law firm merger failure.
One last prediction for law firm mergers is that a major law firm will collapse in a year’s time. This prediction is made keeping in mind the financial conditions of firms. If they continue to suffer from financial distress, there’s a high chance of their collapse. If firms continue to cut income of their people, it is a high chance that these people will leave the firm for good. This will be the biggest reason for law firms to collapse.
All in all, 2014 will not be as bad for most of the law firms.