“The only constant is change” is perhaps particularly appropriate to legal firms with the implications of the Legal Services Act and the impact of the SRA on how practices will operate in future. However all professions face similar change and such change provides opportunities – a significant one being the potential for merger. This programme considers the issue surrounding a merger – if and how in particular.

Merger is an option for the majority of practices and many embarking on this route often lose sight of the fact that a merger must increase profits, whether in fact they are the acquirer or the target and the strategic reason for doing so.

We discuss the importance of the “people fit” and the main reasons for failure to achieve a merger. Having agreed strategically to seek a merger we then take a look at how to find a merger party and the importance of having a merger team with authority and “clout”.

Financial disparities surrounding the value of assets, the level of profits, capital contributions and level of bank gearing often prove deal breakers and we discuss how to overcome any such disparity. Finally we look at practical issues that mainly apply post deal date, but are a vital part of the process and, perhaps controversially, the suggestion that if “proper” negotiations last longer than six months the merger is unlikely to happen.

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Next in the Series: Profit Sharing Regime and Capital Structures