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Successfully joining together two or more sets of chambers can boost individual members’ practices, open new avenues of work, present new clients and provide greater strength in depth. For many, it can be the catalyst to approach business development with greater confidence and renewed energy.
Mergers can, of course, go wrong but anecdotally that appears to happen most often when sets merge out of a sense of necessity or for the wrong reasons. Two sets facing the same problems of a dwindling client base – coupled with low income and struggling to pay increasing overheads – are unlikely to solve their problems by simply bolting themselves together. Yes, there will be some savings on overheads, but there still needs to be a healthy ratio of skilled support staff to barristers to ensure that business development and practice management initiatives address the need to increase work streams and revenue. Otherwise, it might just lead to greater competition for the finite work that there is and a greater percentage of members looking for returns or ‘chambers work’ to fill their diaries.
I once heard a football analogy that summed it up perfectly: if two Championship teams merge, they wouldn’t suddenly become a Premiership team – and some people who were previously automatically on the team sheet, might find themselves struggling to get in the first team.
The language used within our industry is often different from that used in the business world. Often the same words and phrases have different meanings and ‘merger’ is one of those. In the more gentrified world within the Inns, a merger conjures up a vision of a marriage made in heaven, where two like-minded and equal units join forces seamlessly, to the benefit of both sides’ clients and the individual members. In the broader commercial world, the term ‘merger’ often appears with another – ‘mergers and acquisitions’. Although true mergers do exist, much of the activity in the wider business world centres on one company buying out another, or a division of the company. Sometimes, ‘merger’ is used in press releases to calm some of the shareholders of the ‘acquired’ company.
Of course, one set can’t ‘acquire’ another set in a true business sense and there is certainly no financial compensation for losing a group to another set – quite the opposite. Individuals may rail against the idea of their own set being taken over and that is perhaps why the much softer ‘merger’ term is used, even when it is very clear that one set is far larger or more dominant in the market than the other.
Barristers can also be consumed by the worry of losing their identity or the identity of their chambers and this can override positive thoughts about the benefits that a takeover would bring to their individual practice. We have seen this idea of ‘a merger not a takeover’, and identity-retention, taken to extreme lengths, with the new entity having a succession of joint heads of chambers, one from each of the old sets, retaining separate clerking teams and even separate computer systems on one occasion I know of. I do respect the fear of losing ‘ownership’ of something you have helped create and it is easy for me to understand, having helped launch a new set as a senior clerk many moons ago, as well as creating ABC Chambers Solutions, some 10 years ago now.
Assuming that the reason for considering a merger is to enable continuing growth as part of a strategic plan, rather than as a necessity for survival, it can make good business sense to strengthen practice teams by lateral recruitment of a group, or by joining forces with a similar set, rather than simply by organic growth, which can take some considerable time. A working group comprised of both members of chambers and senior staff should evaluate the pros and cons of both and run scenarios of the likely effect on income and expenditure of the acquisition of a group, the takeover of a smaller set, or a full-blown merger, factoring in the consequences of possibly losing some members as a result of the latter. It is not rare to lose members in the run-up to, or shortly after, a merger – reasons can be as simple as a matter of principle after voting against the idea, or because the process has made a member take time away from a busy practice to really think about their own future and the direction in which they want to go.
Compiling a target list of suitable sets (or a small group) sounds easy enough but sifting from a distance those who might be open to a merger from those who will resist it tooth and nail, is not so easy. Every set does its best to project itself as thriving, and robing rooms are easy places to find barristers who are never too busy to tell everyone how busy they and their chambers are. Clerks are even worse.
Outside help can be very valuable at this stage. Consultants with experience of the culture of chambers, but are not connected or have any vested interest, can bring an objective, professional and business-like view to the set. Additionally, their intimate knowledge of the industry and all the sets within it, can save chambers from overlooking less obvious options or from running up blind alleys.
Once a business plan has made a case for a merger and a range of potential targets have been identified, chambers should authorise a small (and I mean small) team to explore these options and report back to the head of chambers and management committee only. It is in chambers’ vital interest to keep the team small and for everything to be on a need-to-know basis. This is not just to make the process smoother, but it will help to avoid serious repercussions for chambers.
The larger the team, the greater the chance of a leak. If news of a failed merger attempt gets out to the market (and I hear of these often), it can lead to your competitors speculating that you have a problem – especially if it happens more than once as has been seen over recent years. This could easily result in other sets circling to pick off star members, leaving you in a worse position than when you started the journey.
Having a consultant on board can make a huge difference. Approaches can be made anonymously, giving just enough information for interest to be gauged, but without giving away the identity of the enquiring chambers. In the business world, this is known as a ‘teaser’. If there is no interest in the teaser, no harm has been done, but even if there is a positive reaction, it may be much further down the line before each side is identified to the other.
Depending on the instructions, the next step might be an exchange of anonymised business information to make sure there is still real interest before proceeding. Without a consultant ‘buffer’ it can be very difficult to get to any level of disclosure without showing your hand. That may not be a problem if the merger takes place, but it is potentially a disaster if it doesn’t.
Consultants can also advise on the structures and assist on rebranding and marketing the new entity.
Once both sides confirm that they are happy to move on to the next stage, the sets can be more open with information given to each other’s working group, before going back to members to vote if the following talks are all positive.
Merger talks should be a closely guarded secret known only to a select few until the right moment. It is a difficult balancing act, of course, because it is important to take members on the journey with you and the best way to make everyone feel part of the process is to involve everyone at every stage. Unfortunately, that can also be the best way to lose control of the vital confidentiality aspect. A sure way to scupper the process is for one set to learn that the other has breached confidentiality or hear of your earlier failed merger attempts.
Merging with another set which has similar ethos and objectives might be the solution to how you can achieve your strategic aims, whatever position your chambers finds itself in at the moment. The possibility of merger should therefore always be on the radar of your management committee.
Although we have seen solicitors and BSB entities employing individual barristers, we are yet to see a large law firm or professional-services provider taking over a set or one of their practice groups. Now, that would be a true M&A in any language!
Bill Conner is Founder Director of ABC Chambers Solutions LLP which specialises in consultancy, recruitment and training for chambers.
Successfully joining together two or more sets of chambers can boost individual members’ practices, open new avenues of work, present new clients and provide greater strength in depth. For many, it can be the catalyst to approach business development with greater confidence and renewed energy.
Mergers can, of course, go wrong but anecdotally that appears to happen most often when sets merge out of a sense of necessity or for the wrong reasons. Two sets facing the same problems of a dwindling client base – coupled with low income and struggling to pay increasing overheads – are unlikely to solve their problems by simply bolting themselves together. Yes, there will be some savings on overheads, but there still needs to be a healthy ratio of skilled support staff to barristers to ensure that business development and practice management initiatives address the need to increase work streams and revenue. Otherwise, it might just lead to greater competition for the finite work that there is and a greater percentage of members looking for returns or ‘chambers work’ to fill their diaries.
I once heard a football analogy that summed it up perfectly: if two Championship teams merge, they wouldn’t suddenly become a Premiership team – and some people who were previously automatically on the team sheet, might find themselves struggling to get in the first team.
The language used within our industry is often different from that used in the business world. Often the same words and phrases have different meanings and ‘merger’ is one of those. In the more gentrified world within the Inns, a merger conjures up a vision of a marriage made in heaven, where two like-minded and equal units join forces seamlessly, to the benefit of both sides’ clients and the individual members. In the broader commercial world, the term ‘merger’ often appears with another – ‘mergers and acquisitions’. Although true mergers do exist, much of the activity in the wider business world centres on one company buying out another, or a division of the company. Sometimes, ‘merger’ is used in press releases to calm some of the shareholders of the ‘acquired’ company.
Of course, one set can’t ‘acquire’ another set in a true business sense and there is certainly no financial compensation for losing a group to another set – quite the opposite. Individuals may rail against the idea of their own set being taken over and that is perhaps why the much softer ‘merger’ term is used, even when it is very clear that one set is far larger or more dominant in the market than the other.
Barristers can also be consumed by the worry of losing their identity or the identity of their chambers and this can override positive thoughts about the benefits that a takeover would bring to their individual practice. We have seen this idea of ‘a merger not a takeover’, and identity-retention, taken to extreme lengths, with the new entity having a succession of joint heads of chambers, one from each of the old sets, retaining separate clerking teams and even separate computer systems on one occasion I know of. I do respect the fear of losing ‘ownership’ of something you have helped create and it is easy for me to understand, having helped launch a new set as a senior clerk many moons ago, as well as creating ABC Chambers Solutions, some 10 years ago now.
Assuming that the reason for considering a merger is to enable continuing growth as part of a strategic plan, rather than as a necessity for survival, it can make good business sense to strengthen practice teams by lateral recruitment of a group, or by joining forces with a similar set, rather than simply by organic growth, which can take some considerable time. A working group comprised of both members of chambers and senior staff should evaluate the pros and cons of both and run scenarios of the likely effect on income and expenditure of the acquisition of a group, the takeover of a smaller set, or a full-blown merger, factoring in the consequences of possibly losing some members as a result of the latter. It is not rare to lose members in the run-up to, or shortly after, a merger – reasons can be as simple as a matter of principle after voting against the idea, or because the process has made a member take time away from a busy practice to really think about their own future and the direction in which they want to go.
Compiling a target list of suitable sets (or a small group) sounds easy enough but sifting from a distance those who might be open to a merger from those who will resist it tooth and nail, is not so easy. Every set does its best to project itself as thriving, and robing rooms are easy places to find barristers who are never too busy to tell everyone how busy they and their chambers are. Clerks are even worse.
Outside help can be very valuable at this stage. Consultants with experience of the culture of chambers, but are not connected or have any vested interest, can bring an objective, professional and business-like view to the set. Additionally, their intimate knowledge of the industry and all the sets within it, can save chambers from overlooking less obvious options or from running up blind alleys.
Once a business plan has made a case for a merger and a range of potential targets have been identified, chambers should authorise a small (and I mean small) team to explore these options and report back to the head of chambers and management committee only. It is in chambers’ vital interest to keep the team small and for everything to be on a need-to-know basis. This is not just to make the process smoother, but it will help to avoid serious repercussions for chambers.
The larger the team, the greater the chance of a leak. If news of a failed merger attempt gets out to the market (and I hear of these often), it can lead to your competitors speculating that you have a problem – especially if it happens more than once as has been seen over recent years. This could easily result in other sets circling to pick off star members, leaving you in a worse position than when you started the journey.
Having a consultant on board can make a huge difference. Approaches can be made anonymously, giving just enough information for interest to be gauged, but without giving away the identity of the enquiring chambers. In the business world, this is known as a ‘teaser’. If there is no interest in the teaser, no harm has been done, but even if there is a positive reaction, it may be much further down the line before each side is identified to the other.
Depending on the instructions, the next step might be an exchange of anonymised business information to make sure there is still real interest before proceeding. Without a consultant ‘buffer’ it can be very difficult to get to any level of disclosure without showing your hand. That may not be a problem if the merger takes place, but it is potentially a disaster if it doesn’t.
Consultants can also advise on the structures and assist on rebranding and marketing the new entity.
Once both sides confirm that they are happy to move on to the next stage, the sets can be more open with information given to each other’s working group, before going back to members to vote if the following talks are all positive.
Merger talks should be a closely guarded secret known only to a select few until the right moment. It is a difficult balancing act, of course, because it is important to take members on the journey with you and the best way to make everyone feel part of the process is to involve everyone at every stage. Unfortunately, that can also be the best way to lose control of the vital confidentiality aspect. A sure way to scupper the process is for one set to learn that the other has breached confidentiality or hear of your earlier failed merger attempts.
Merging with another set which has similar ethos and objectives might be the solution to how you can achieve your strategic aims, whatever position your chambers finds itself in at the moment. The possibility of merger should therefore always be on the radar of your management committee.
Although we have seen solicitors and BSB entities employing individual barristers, we are yet to see a large law firm or professional-services provider taking over a set or one of their practice groups. Now, that would be a true M&A in any language!
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