Cross-profession merging will soon increase, as Giles Murphy of Smith & Williamson explains in this TV show.

Cross-profession merging and related regulators

I think what we’re expecting to see over the next few years is professions actually from different areas merging with each other. So the obvious example is an accountancy firm merging with a law firm. Now to date regulation has been such that it’s been very difficult to execute a transaction of that nature, but increasingly the regulators are seeing the market in a different way. So, for example, the ICAW is applying to actually be a regulator of law firms. The principle concept behind that is that an accountancy firm can merge with a law firm but still only have the need for one regulator rather than as it currently exists at the moment. If you did try and execute some of these cross-profession mergers you’d end up having to satisfy several regulators at the same time.   If you found this TV show interesting and want to hear more about Cross-profession merging and similar subjects then browse our videos and follow @InsideFinanceTV on Twitter.  

Merger and acquisition can happen across industries and across borders. In this TV show Giles Murphy goes through the typical merger process.

Merger and acquisition in reality

In theory it should be a simple project management exercise. Unfortunately, in our experience, most people prepare very poorly for such an event and in practice spend a lot of time focusing on the merger transaction itself and forget to put effort into the integration process that should happen afterwards. Much would depend upon whether it is a simple domestic merger or whether there’s international firms coming together, but if we take a simple domestic merger, our view is, in terms of the negotiations, really a period of six to eight weeks should be enough for the negotiations to identify whether there are any key deal breakers that one might have to consider. As I say, what often happens is that people focus on that element of negotiation. They then breathe a sigh of relief when the deal actually gets done, and yet what we would say is that’s when the difficult work happens where firms need to prepare much better for the post-deal integration because that ultimately determines how successful the merger will be.

Browse Inside Finance TV for many more videos on merger and acquisition processes.

Good governance is essential for a well run business. Pamela Sayers explains how ignoring tax changes will bury firms.

Good governance of firms

I think if firms ignore this they’re certainly at risk of managing their own affairs in an effective way, and it does come down to good governance within the firm and well run firm. Those firms that try to sort of generalise and everything may well not survive. We’ve already heard rumours that there are a few firms within the top 100 that are struggling. And everyone was very shocked when we heard about the collapse of Halliwells, and then there was. I think there will be other firms as well perhaps before the end of this year. _____________________________________________________________________ If you found this video about good governance interesting, please browse the rest of the TV shows on Inside Finance TV.

Legal sector events and surveys are a great way to see how the industry is developing, as Pamela Sayers discusses in his TV show.

Gauging the climate of the legal sector

We do a great deal actually within the professional practices space. Specifically for the legal sector, we run a survey each year, and this year we’ve just completed our 19th survey, and we have over 100 participants to that survey, of which more than a quarter are from the top 100 firms. And we ask a broad range of questions, and that gives us a good indication of what the market is thinking. We also run a series of seminars for newly promoted partners, partners coming to the end of their career, coming up for retirements, and also those midway through their career. We also run a series of dinners for senior partners, managing partners, and finance directors of law firms, and all held within Chatham House rules and actually very popular. We’re holding on this evening in fact. We have ten guests from the top one hundred law firms. _____________________________________________________ If you enjoyed this video about gauging the climate of the legal sector why not watch more TV shows on Inside Finance TV

Restructuring by merging is now an accepted survival strategy in the financial industry marketplace, as Giles Murphy discusses in this TV show.

Restructuring firms across industry

I think there's an acceptance in the marketplace that there is an oversupply of particularly lawyers, but also all professional advisors to a market that at best is flat, in some areas may well be contracting, and therefore there’s simply a question of surviving the next few years. While we might be entering a more benign economic environment, clearly there are still some firms that are struggling, and one of the only options they will have is to find a larger party with which to merge to give them some sort of strength to actually really stand a chance of surviving over the next few years.

If you found this video about restructuring in the finance industry interesting, why not follow @InsideFinanceTV on Twitter?

Merger and acquisition can involve any sized firm but, as Giles Murphy discusses in this TV show, is more likely to involve a big and a small party.

Merger and acquisition - The big with the small

I think it’s much harder these days to actually execute a merger where you’ve got two similar sized firms. The reason for that is inevitably there’s a level of compromise that has to be achieved and therefore both firms often feel like they’re giving something away. So what we’re increasingly seeing is mergers taking place where there is a much more dominant party, which essentially acquires the much smaller firm. As a result of that, a lot of the difficult decisions that have to be taken post-merger can be executed in a much simpler way. ________________________________________________ If you found this video about mergers and acquisitions, why not browse more TV shows on Inside Finance TV.  

Cross border mergers can be an exciting option, says Giles Murphy of Smith & Williamson, in this Inside Finance TV show.

Cross border mergers - Drivers and characteristics

I think the international option is quite an exciting one. The UK domestic economy is clearly struggling, and even with 1 or 2% growth as we come out of recession we’ll not be particularly exciting for professional firms. Contrast that with growth in Far Eastern countries and the emerging world of 10,12, or 15% and you can see why international mergers are attractive for UK-based law firms. However, not only does the merger have to deal with all of the people issues that you would have with the domestic merger, you also need to cover the different cultural issues, the taxation issues, and the different structures that are allowed and not allowed cross-border. So effectively it’s taking a UK domestic merger and adding a layer of complexity on top of that. _______________________________________________________________________________________ Inside Finance TV are very interested in restructuring and recovery strategies like cross border mergers. Look out for more TV shows with Smith & Williamson.

Restructuring and merging of legal firms, is what Smith & Williamson's Pamela Sayers is predicting in this Inside Finance TV show.

Restructuring and Mergers

I think we will see more mergers within the legal profession. I mean there’s certainly a great deal of merger chatter at any one time. I mean the old saying of one managing partner phoning another, saying “Fancy a cup of coffee?” what it really means is “Fancy merging?” Obviously, putting two mediocre firms together, both struggling perhaps, doesn't make a stronger firm. So I think we’ll definitely see some more consolidation within the marketplace. I think we’ll also see firms expanding more internationally where there’s stronger parts in other jurisdictions to improve the profitability of their firms. And I think we’ll see more firms go down the Legal Services Act and become an alternative business structure, and perhaps either dispose of part of their business or sell their business. ________________________________________________________________________________________________________ Inside Finance will continue to look at restructuring across different industries in upcoming TV shows.