Mergers & Acquisitions Birmingham : Advantage Consulting

Mergers & Acquisitions

Advantage Consulting offer a bespoke Mergers & Acquisitions service specifically for lawyers and solicitors firms.

The problem with organic growth is that it is slow and on its own is rarely sufficient, especially for smaller firms. It is very easy to focus attention on two or three key people only to find that, having trained them and just as they become productive and profitable, they leave. Organic growth is always part of the picture but it is rarely sufficient. Firms who rely entirely on organic growth are likely over time to be overtaken by their competitors. For most firms a merger or acquisition can, if done right, be critical in moving them to the next level or creating the economies of scale needed.

What is the merger or acquisition process?

Our work on mergers typically involves working with both firms over a period of time addressing these and other key issues. Sometimes it can be very useful for the partners in both firms to meet and in effect have a joint partner retreat. It can be a great way of helping the two teams to bond.

Advantage Consulting will manage the process:

  • We value firms and negotiate terms.
  • We carry out due diligence.
  • We provide law firms with a list of areas that we commonly review and agree with them which areas would be most beneficial to include within our due diligence scope.
  • We then prepare our report to management, designed to highlight potential risks of the merger.
  • We undertake financial modelling to highlight potential synergies, cost savings and most importantly how the profit share and capital accounts might look.
  • We advise on any tax implications of the proposed merger and how to minimise any tax exposure.
  • We provide a detailed merger checklist that identifies all of the tasks that commonly need to be completed to enact a merger, and also the risks and other factors that firms should be aware of.
  • The checklist allows us to allocate merger tasks, set deadlines for their completion and ensure that they are completed as planned.

Are you considering acquiring another law firm?

Making the decision to buy another solicitors practice is an important decision which requires input from our experienced and knowledgeable business advisors who can keep you on the right track and help to make the process as smooth as it can be.

Our M&A Team of Experts has a wealth of experience of advising lawyers right from the beginning stages of acquisition through to final completion and have advised clients on both sides of the process.

As a full-service firm, we can assist you with all aspects of the acquisition and merger process.

We regularly advise lawyers on:

  • All relevant documentation and agreements in relation to the acquisition, including contracts
  • Tax arrangements, and how to structure acquisition tax efficiently
  • Share schemes and employee benefits, and ensuring these are as tax efficient as possible
  • Intellectual property
  • Data protection and privacy issues
  • Employment issues which may arise as a result of acquisition

We will work closely with you to fully understand your business and objectives in order to provide clear, practical and tailored advice for you to consider, undertake due diligence as efficiently and cost-effectively as possible and use our extensive knowledge and experience to get the deal over the line as quickly and smoothly as possible.

Growing your practice by merger or acquisition

In the early stages of a transaction, the first three phases are:

  • Pre-due diligence
  • Due diligence
  • Documentation

What is Due Diligence?

The Due Diligence process itself is likely to involve our lawyers and accountants setting up a “data room” where the key information that the buyer has asked to see is provided. These “data rooms” are now frequently online data rooms. The more organised the business is, generally the easier this process will be. Usually, the managing partner of a law firm will not want too many of its employees knowing about a potential sale. This can have an impact on the information gathering and often puts a greater burden on the partners. It is usually worth considering bringing some colleagues into the process to help ease that burden.

What M&A Documentation is required?

Assuming that due diligence has progressed well, we will then move to produce the first drafts of the main deal documents (Heads of Terms). The documentation is often produced at an early stage in the due diligence process so that negotiation of the documents can take place whilst the due diligence is ongoing. In most cases, it is going to be the buyer’s lawyer who produces most of the deal documents.

There will be a large amount of documentation involved, and these documents can take time to agree, which is why it is important to have our expert lawyers and accountants instructed to guide you through what could otherwise be a difficult and protracted process.

The main document will be the acquisition agreement (e.g. Sale and Purchase Agreement or Asset Purchase Agreement), but ancillary documents also play a vital role. It is important to avoid negotiating key documents at the last minute – preparation and planning is critical.

Our expert M&A consultants will draw up a detailed timetable and responsibility list which will be adhered to. When you appoint us, we will give you a list of the documents that are likely to be required. This will give you an idea of what is involved in the M&A process and may also indicate to you what you will need tod through this process.

What is the process for selling my law firm?

When considering selling your law firm there will be many questions and concerns going in your head. Who would buy my practice? Do my financial results need to improve to attract a buyer? When am I going to find the time to do this?

Who would buy my solicitors practice?

A common issue is that lawyers simply don’t know who the potential buyers might be and where a potential acquisition may come from. In many cases, the best way to maximise value for your solicitors firm is not to sell to a competitor but to sell to a complimentary buyer where the synergies offered by your business allow the buyer to extract considerable value both from its existing business and from your business. Remember that a law firm is worth what someone is prepared to pay for it. The more value a buyer can extract from your business, the more you can ask them to pay in the acquisition.

Don’t I need to improve financial results before trying to sell my law firm?

Poor financial performance is also an obstacle that many lawyers think they need to overcome before they start giving thought to an exit. This is flawed logic: lawyers do need to address financial performance, but it needs to be considered in conjunction with potential exit strategies.

Quite simply, many lawyers are too busy to focus on exit strategies. This is understandable as it is, of course, the priority of business owners to focus on the day-to-day success and running of their business. However, this can make it difficult to consider potential succession planning.

Do I really want to sell my law firm?

Often the biggest issue, however, for many lawyers is they simply don’t have any desire to sell at the present time or any other time. Most lawyers are not entrepreneurial, they are not driven by money, some would even argue that most lawyers are “lazy” as they just want to enjoy a simple and comfortable lifestyle (9am - 5pm job). Lawyers tend to enjoy the position they have within the business and the local community. We know from experience of working with thousands of solicitors that most of them have concerns (often sub-consciously) about how their “community position” might be affected if they were no longer involved in the law business. This can be a particular area of tension in family businesses where not all the owners might be involved in the business and the stakeholders will have competing interests. Regardless of the individual situation and how comfortable you are right now as a business owner, it is crucial that you plan ahead to consider the future and the legacy of your law practice.

How our Merger & Acquisition Consultants Can Help?

Our corporate team has years of experience helping lawyers and a variety of other parties with their M&A needs. M&A transactions can have a range of technical considerations that need to be addressed such as tax, competition, pensions, technical or regulatory. As a full-service law firm, we have specialists across all these areas.

Our M&A team is led by Mr Rudi Kesic, one of the most highly regarded and experienced legal sector consultants in the country, who will always ensure that our firm’s advice is properly coordinated and focused upon achieving your commercial goals. Mr Kesic prides himself on being responsive and delivering concise, practical advice which is focused on problem solving and getting the job done.

Advantage Consulting are well known in the M&A community which means that we can ensure that where appropriate we introduce our clients to the very best professional advisors in related areas such as corporate finance.

For more information on how we can help your law firm, please call us on 0121 212 6580 or request a free call-back using our Contact Form to get free initial advice.

You can also access a wealth of free business information for lawyers by visiting our digital Resource Centre and view our free Business Factsheets.

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