The merger of CMS UK, Nabarro and Olswang will position the combined firm to better compete on the international stage, and may spark rivals into similar action, according to an expert in the field.
Legal consultant Richard Tromans, whose company Tromans Consulting advises top firms on strategic management, including mergers, said that this was the biggest legal merger in the UK for some time, and would lead to a “very interesting combination”, with the addition of Nabarro’s top-tier commercial property practice expected to have a big impact.
He said that mergers of this kind are attractive to law firms because they provide “economies of scale”, allowing larger numbers of partners to share major overheads, including property costs, and invest in technology and business growth.
In addition, larger law firms are more attractive to heavyweight clients.
Tromans said: “Like attracts like. Larger companies use panels of law firms. Being very large gets you on to that short list.”
In addition, combining firms means that additional specialisms can be offered, so a client that first comes to a firm seeking property advice may also find expertise in relation to tax without needing to seek out other lawyers.
Tromans added: “Bringing all that together in one firm, you can find that two plus two equals five. It is more of a one-stop shop.”
He said that Brexit has illustrated the need to have an even more global approach to business, and that the merger between these three firms will give them a “much better international profile”.
As news of the merger sinks in, it may spur rival firms into consolidation in order to compete: “Some of the peer firms will now be competing against a much bigger firm. That may make some firms say to themselves, we need to be bigger as well.”
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