A third of small and medium sized firms expect to merge in the coming year as the trend to join forces continues, according to research by the Law Consultancy Network.
The fourth set of six-monthly statistics complied by consultant Andrew Otterburn showed that 21 of the 64 firms surveyed considered there was a good chance of a merger in the coming year, or that a merger was almost definite. That is compared with 26% in the survey two years ago. Over the past two years there has been a steady fall in the number of respondents who thought a merger was unlikely, dropping from 47% to 28%.
The survey showed that 86% of firms had considered the possibility of a merger in the six months between July and December 2011, up from 75% in the poll two years ago.
Over the same period, 22% of firms had completed a merger, down from 33% in the previous six months, but up from 13% two years ago.
The results also indicated a 25% increase in the number of approaches made by or to them in the second half of 2011, a slower increase than six months ago.
Once again, the results indicated a difference in attitude towards mergers according to the size of the firm, with 43% of firms with 10 or more partners indicating they were likely to merge, compared with 21% of firms with fewer than 10 partners.
Commenting on the results, Otterburn said: ‘The survey indicates continuing strong merger activity, which is our experience amongst our clients.
‘Most firms we are advising have had discussions with at least one firm in recent months and have identified possible merger candidates or teams of people.'
Otterburn said growth through a merger or acquisition is not the only way of achieving growth but said it can be an effective way of achieving a step change, providing firms find a compatible partner.