A law firm leader with an ‘aggressive’ acquisition strategy has warned principals looking to sell their business that they are running out of time to get best value from the transaction.
Simon Gibson (pictured), managing partner at Liverpool-based SGI Legal, said owners looking to exit the personal injury market have until Christmas to complete a deal on their terms.
After that, he said, the diminution of cases dating from before the LASPO reforms on 1 April – in addition to the proposed raising of the small claims limit – will encourage potential purchasers to drive a harder bargain.
‘Firms that are considering a business or WIP [work in progress] sale but have delayed a decision are losing money every day,’ said Gibson.
‘While it is currently a seller’s market, I expect this will change in the new year as the number of sellers increases and the number of credible buyers – that is, firms with the cash resources in place and the support of indemnity insurers – falls.’
Gibson, whose firm bought the PI book of Midlands firm Challinors in August, said a recent deal to buy a Liverpool firm had collapsed after the sellers demanded all the money up front.
His comments follow a flurry of merger activity and speculation in which:
- Manchester firm Linder Myers completed a pre-pack acquisition of Lancashire firm Dickson Haslam;
- Top-100 firms Penningtons and Manches confirmed management-level talks about a possible merger;
- Three Norfolk firms – GHP Solicitors, HVA and Overburys confirmed a merger to form Spire Solicitors LLP.
Meanwhile, Manchester firm Pannone said there was ‘nothing to report’ on rumours linking it with a takeover by national firm and Australia-listed Slater & Gordon.
Both parties said they are looking at merger opportunities but said speculation of a deal was premature.