Acquihiring in the Legal sector – sound business move or risky strategy?
AirBnB, Google, Skype and even Facebook have all done it, but how common is aquihiring in the legal sector? Given the sharp rise in M&A activity over the last few years, it won’t surprise you to learn that instances of legal firms buying other firms to get hold of their employees is fast-becoming common practice.
This was something we were asked to comment on recently in a special feature published by Raconteur in The Times (see here).
The last few years has seen this industry rife with Mergers and Acquisitions. Some of these deals have been strategic, as firms seek to gain that all-important competitive advantage and strengthen their position in the face of an uncertain post-Brexit era.
But a significant number are a reaction to an increasingly competitive Legal landscape, where firms are vying with one another to attract and retain the best talent.
The Legal sector is made up of a plethora of smaller law firms that offer larger firms an extra dimension to their existing businesses. They typically have the right mix of culture, innovative ideas, processes that are proven to build profitable client portfolios, and teams of people who – as clichéd as it seems – really are greater than the sum of the organisation’s parts. It is the latter point that is the primary driver for aqcuihiring.
In the Legal and other sectors for that matter, clients tend to buy the services of the Lawyer as opposed to the firm itself. Yes, the ‘name’ of the firm must have been enough to attract them to call upon said law firm in the first place, but the brand and reputation of the firm is nothing without the talent of those who work within it.
Of course, such firms provide the infrastructure, HR, marketing and other essential functions that keep the wheels of the business itself turning. However, it is the ability of the individual that is the critical factor here.
Acquiring is a quick and effective way for large companies to absorb a ready-made team of talented professionals. But it’s not just the procurement of the best people in foul swoop, diversification of existing services is another reason.
As organisations seek to grow, they need to look outside their current remit and identify areas to broaden their operations. Slater & Gordon’s recent deal with insurance and risk law specialists BLM is a case in point. Diversifying into a different market can be challenging, so it is much easier to ‘buy’ a team. This enables the business to achieve profit sooner rather than starting from the ground up. It is also an opportunity for firms looking to ’downsize’, re-structure due to financing and the like – they ’sell’ the team as they themselves cannot afford to sustain it.
Acquihiring is certainly one way of securing the legal talent that your firm needs, finding that talent through a specialist legal recruitment firm run by Solicitors is another. If you’re looking to add to your legal teams over the coming months, get in touch with us today – as legal practitioners ourselves, we ‘get’ what you need more than most.