Consolidators look to mid-tier firms

Small to medium-size firms looking to attract investment may be encouraged by news from the likes of Gordon Dadds and Simpson Millar at the close of 2018.

The former announced its £27.3m acquisition of Ince & Co’s UK business to the market on 31 December, when group chief executive Adrian Biles also outlined the firm’s ongoing acquisition strategy.

“We have refined our acquisition strategy into three categories”, he said. “UK firms with over £10 million of annual fee income, international acquisitions which will add to the depth of our core business and smaller acquisitions which can be absorbed into existing offices, increasing the intellectual capital of the group through niche specialisms and promoting cross-selling.”

Ince & Co, which has a history stretching back to Cardiff in 1866, is characterised by a heavy focus on shipping and commercial law.

The firm’s international offices were not included in the Gordon Dadds deal, although they were reported to have agreed to enter into new network arrangements with the acquiring firm.

However, on 7 January it emerged that Ince & Co had been placed into administration on the same the day that Gordon Dadds announced the deal.

Gordon Dadds established itself'¨as a mid-tier consolidator in 2017 after acquiring a succession of struggling firms including Prolegal, Davenport Lyons and Platt & Associates. It then went on to become the second UK law firm to oat in August that year.

Meanwhile, Simpson Millar – a firm that was in the running to merge with erstwhile Slater & Gordon way back in 2014 – has also publicised its appetite for investment.

The private-equity backed firm announced its acquisition of JWK’s three North-Western offices at the start of December, following a similar deal for Liverpool-based firm EAD in September 2018.

Not only does Simpson Miller have a £50m warchest with which to execute its consolidation play'¨but owner Doorway Capital is also looking to grow its portfolio of investments.

The PE firm’s law gradate turned investment banker founder Steve Din is on record arguing for greater consolidation in consumer law and calling for greater modernisation in law firm technology.