YORKSHIRE’s biggest law firm, Irwin Mitchell, is actively exploring merger and acquisition opportunities, according to its group chief executive.
John Pickering said the creation of the Alternative Business Structure (ABS) had opened up a new commercial dynamic for the legal sector.
He said: “ABS allows us to be a bit more imaginative..It gives the business the flexibility to become significantly larger and expand through a number of routes, including, for example, share-based transactions.”
Earlier this month, Irwin Mitchell acquired PDP Management Services, in the latest stage of its plans to expand its business offering. It is buying the company, which specialises in arrears management, through its Ascent subsidiary. PDP will continue to trade under its own name.
In August, Irwin Mitchell was approved as an ABS, which means it can receive backing from external investors. Irwin Mitchell, which has 1,300 staff at its offices in Leeds and Sheffield, was the first company to be granted multiple ABS licences by the Solicitors Regulatory Authority (SRA).
ABS was introduced as part of the Legal Services Act, which allows outsiders to take equity stakes in law firms for the first time, creating major opportunities for entrepreneurial practices that use external equity to grow their market share.
Mr Pickering told the Yorkshire Post yesterday: “We are already seeing very significant enterprises from the non-traditional legal space entering the market, and I believe we have only scratched the surface in terms of what can happen. A study by Espirito Santo bank forecast that, in the next four or five years, there will be significant consolidation in the legal sector. There are currently 11,000 firms and, over time, there will be far fewer players.
“This will encourage the creation of larger, stronger firms. We subscribe to this view and it is our vision to be one of these larger firms and become the legal brand of choice.”
Mr Pickering said it was “no secret” that Irwin Mitchell was seeking to grow its business across both its personal and business legal services divisions.
He added: “One of the mechanisms is merger and acquisition and we are actively exploring our options in this area, particularly as it enables Irwin Mitchell to build market share, while also attracting high level people.”
He added: “Could Irwin Mitchell one day be on the public markets? It’s possible. It’s one of the options. Irwin Mitchell could continue as a private company, or we could engage with private equity. There are quite a variety of ways of taking on investments.”
Irwin Mitchell, which recently reported a 6.8 per cent rise in turnover to £183.7m for the financial year 2011/12, first announced that it would seek ABS status in April last year.
It was among the first applicants for ABS status when the SRA began taking applications in the first week of January. It has been granted five licences by the regulator, covering a range of businesses within its group structure.
Last year, Irwin Mitchell recorded an £80m turnover in Yorkshire, and Mr Pickering confirmed that the firm was continuing to perform strongly in the region.