An annual contribution of close to £4bn to the UK’s balance of trade notwithstanding, most headline news from the legal sector has been on the gloomy side since 2008. Even if one were to remove from the equation the effects of both legal market liberalisation and cuts to legal aid, this would still be the case.
That is evident in the pressure on law firms to consolidate, which exists in all parts of the legal market. As research conducted in association with the Gazette confirms today, that pressure is increasing, with even more firms seeking the benefits they suppose consolidation will deliver.
Underpinning this is a period of profound structural adjustment in the legal services economy. This ‘results season’ is telling its own story of persistently mediocre results, confirming the conclusion of annual Citibank research that larger firms are operating in a market that is 5% ‘over-lawyered’.
Command economies seek to manage structural economic change smoothly – an option that is unavailable to solicitors in England and Wales. The suspicion is that merger can only be part of the answer for firms seeking to first survive and then thrive.
A time, then, for innovation wedded to good judgement.