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Law firm mergers have been rising over the last few years and small firms are doing a lot to push those numbers up.
The number of firm mergers has increased dramatically since 2010 when the recession showed signs of ending. In 2011 the vast majority of firms involved in mergers were small practices, according to the Martindale-Hubbell Blog.
Now mergers seem be leveling off although there are still plenty of them happening. So is it time for your practice to merge?
There are two kinds of mergers that small firms generally go through. Some involve a big firm buying up a small firm and some involve two similar-size firms becoming one office.
The first option is a relatively easy choice to make. If you want to work for a large firm than merging into a larger organization is a good idea. If you like your independence then it probably won't work well.
The real dilemma is when to merge with a similar-sized firm.
Mergers are a good alternative to growing organically and they allow you to offer greater services to your clients. If you merge with an office that provides different legal services you can double your offerings without having to learn a whole new practice of law from the ground up.
Combining with another firm can also allow you to take on bigger clients than two solo attorneys could handle alone.
Having multiple attorneys on a case is more attractive to bigger business deals or litigation issues. Merging with another firm can attract those clients without the expense of taking on a new attorney who doesn't have an existing client base.
The difficulties of merging can include determining compensation strategies, splitting profits, and redefining your firm's image.
Many of those issues can be minimized by drafting a good initial contract between you and your new co-worker. It also helps to pick a good marketing partner to get your business off on the right foot.
Don't dismiss the idea of a merger as a way to expand. If you're looking to grow your small firm without taking on new attorneys, it may be the right choice for you and your law firm.