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Rejoinder to ‘Merger mania: who says size matters?’

April 8th, 2012 |

I have never met Chris Carroll, senior partner at Travers Smiths in London, but when I came across a recent post of his I felt I knew him well. I quote two sections of Mr Carroll's post:  "As we know, many of the winds driving consolidation are now blowing in the same direction at the same time. I had lunch with a well known consultant last week and the talk was of little else.  Mergers, mergers, mergers.  Mergers in the City, mergers with Americans, mergers with Canadians, mergers with Australians, mergers between the Chinese and Australians.  And more mergers in the pipeline.... Are all these mergers a good idea?  So far as one can judge from the outside, some seem to have sound strategic foundations.  Others seem to smack more of desperation.  And do these mergers actually add to the sum of human happiness among the partners of the two merged entities?  Lawyers hate change, hate being told what to do, loathe red tape, like to be left to their own devices, like to have control over their own destiny and like to have the ear of the management.  Most mergers seem to offer the precise opposite."

I re-read the post, just be sure I'd not missed a key word, "clients". No, I had not, not a single mention of what's driving mergers from a client service and client value perspective. And then I recognised in Chris Carroll some of the senior and managing partners I do know. Not all of them, I hasten to add, hold views like Mr Carroll's. Just those who view world in the rear view mirror and those who seem to hope against hope that the 'good old days' will return.

Yes, I am one of those advisers to law (and other professional services) firms to which Mr Carroll refers. Yes, I was practising my profession when he strode into his first partners meeting. And yes, I am believer in mergers that benefit clients.

I am also a believer that the first duty of all professional services firms is to get 'better' at serving their clients. If they do this well, then chances are they will also get bigger–quite often by merger. Partners come second.

By George Beatonis a director of Beaton Capital and Beaton Research + Consulting. You can find George on Google+ at +George Beaton.

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