At first blush there is no obvious link between fixed fees, Halifax expanding its legal offering and law firm mergers, but together they encapsulate the challenge facing smaller practices.

When the cry goes up to ‘do something’ in the face of difficult times, the ‘something’ most firms automatically reach for is merger. But combining two small, weak practices does not make one big, stronger one – potentially it just multiplies the problems.

One of the reasons the 360 Legal Group survey we report on this week has found smaller firms nevertheless lining up to merge is undoubtedly the fast-advancing competitive threat from the likes of Halifax. But 360 would say there is more to a strategy than ‘big is beautiful’.

Fixed fees are a good example of why. They are becoming more common, especially in high-volume practice areas, and if Lord Justice Jackson gets his way will be extended across all fast-track litigation. A danger of fixed fees is that firms stop time recording and – happy just to have the work – lose track of whether they actually make any money from it.

The point is that too many firms are acting (or more often reacting) before they have taken the time to really understand their own businesses. It is ironic to think that solicitors may need to make more use of their legal training – examining the evidence to build a convincing case – to become better business people.