Law firm mergers up 23% in past year, Hazlewoods finds

The number of law firm mergers in the UK have risen 23% in the past year from 99 in 2021 to 122 in 2022, new research from Hazlewoods has found. 

This comes as law firms have been using mergers to shed excess office space, as hybrid work became the norm.

As a result, M&A deals involving law firms have bounced back from the slump in activity caused by the pandemic, which slowed merger activity in the sector.

Due to the adoption of hybrid working, lawyers are reportedly finding they need less office space, so a merger can sometimes help deal with that problem by allowing two law firms to merge their combined teams and reduce their footprint.

This in turn can bring down overall costs and strengthen operating margins.

Ian Johnson, associate partner at Hazlewoods, said: “After two sluggish years, M&A activity between law firms has come back to life. Expansion minded law firms are feeling more confident about acquisitions of firms with very specific expertise or those firms that have been struggling with their profitability.

“A very tight labour market that makes it hard to recruit lawyers and grow organically has also made growing by acquisition look more attractive.”