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Growth metrics: How scale and geographic spread affect law firm profitability

Do scale and geographic spread dilute economic performance in law firms? Rob Millard reveals his research findings

27 October 2014

When is geographic expansion an appropriate strategy for a law firm? How much does scale really matter? How large does a law firm really need to be? Opening new offices in new markets makes for good press. So too do big mergers or signature lateral hires. But, does simply increasing scale or spread really deliver enhanced economic performance? As growth returns to western legal services markets, and law firms think about how they should respond to their changed world, these questions are becoming increasingly important.

Driven partly by the 'big four' accounting firms ramping up their legal advisory businesses, a view has emerged that somewhere around 20 law firms in a market would be sufficient to create competition and service most clients' needs. Of itself, increased scale seldom delivers better performance unless it corrects a lack of critical mass. Size does matter in law firms, though. Compared to smaller law firms, bigger law firms are usually perc...

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