David Sparkes is back with new venture Millbourn Ross and turning his attention to the M&A market within legal. In this guest blog he shares some of the insights from recent research and introduces his ‘five cohorts’. The question is, which one are you?


The subject itself is deeply emotive, because at its heart, the discussion is about change, and we are not programmed to embrace change. Managing partners/CEOs and leadership teams across the country have a responsibility to understand, if not consider, if M&A is relevant to the firm achieving its strategic goals. This assumes a firm has a coherent and well-defined strategy, which is not true of many firms, but for our purpose, we’ll work on the principle of a firm with a clear strategy. Right now, strategic goals can look very different depending on a firm’s financial and operating position pre-Covid. There is a clear spectrum, with firms at one end who are looking for a home in order to keep the business alive, and at the other end there are firms well documented in the media as having aspirations to treble their revenue in the next few years. Therein lie two very different stories.

As part of the pre-launch due diligence into the M&A market within the legal sector, Millbourn Ross conducted informal research calls with more than 70 managing partners/CEOs and other c-suite operational leaders covering a wide range of law firms with revenue of £1m to £800m.

Key Themes

As an outcome of all the conversations, we identified 12 consistent themes that create a clear picture of the legal market and its behaviours as they relate to M&A:


  1. Serendipity over strategy
  2. Fragmented advisory market
  3. Growth strategies require investment
  4. Market research and introductions lack sophistication
  5. Competing priorities – tactical versus strategic
  6. Spotlight on strategy
  7. Mid-market growth fuelled by team/bolt-on acquisitions
  8. Growth without boundaries
  9. Pinch points will create fluidity in the market
  10. Emergence of cohorts
  11. Everyone wants their name above the door
  12. Goodwill is not that good
The full report on M&A in the legal sector contains more detail on each of the key themes, but for the purpose of this blog, we have decided to focus on the emergence of cohorts.
Emergence of cohorts

During conversations we became increasingly aware that whilst many law firms approached the challenges of the global pandemic crisis in similar ways i.e. adoption of government support, reduction of hours/days for some staff, tightening of external spend, focus on cash collections and deferring tax liabilities, the crisis has been the catalyst for the emergence of distinct cohorts.

These cohorts can be categorised by their attitude to a growth strategy and M&A, alongside the financial, regulatory and operational pressures that have developed as a result of the economic crisis.

The Millbourn Ross Cohort Matrix (see fig.1) identifies five cohorts within a familiar Boston Matrix, around a Low to High axis of ‘Growth strategy’ versus ‘Financial pressure’.

The 5 cohorts are:

  • The Ambitious
  • The Established
  • The Specialists
  • The Reformers
  • The Impacted
The obvious question to ask is which cohort reflects your firm?

In terms of attention ’The Impacted’ features highly. These are firms who have experienced a reduction in fee income up to 30% and are experiencing significant downward pressure on cashflow and finances. Most people are of the opinion that it is ’The Impacted’ firms who will contribute to any significant increase in M&A activity in 2021, as they look for new homes and support from ’The Reformers’ and ’The Ambitious’.

On that note, ’The Ambitious’ are indeed ambitious. The legal media is full of firms whose aspirations are to double, treble and quadruple revenues over the next 3-5 years. This type of scaling can only be achieved through M&A, so it may well be that the pandemic is the catalyst for the perfect storm, with ambitious buyers looking to snap up firms who are looking for a safe port in which to shelter and ultimately survive.

The ones to watch are ‘The Reformers’. Whilst they may have experienced a modest reduction in fee income or flat-lined revenues for the year, they have aspirations to maintain a growth trajectory in order to retain or gain a competitive edge and access economies of scale.


Firms with a growth strategy will need to underpin their aspirations with funding. Some firms are ahead of the game here, with DAC Beachcroft and VWV both securing financing deals in the latter part of 2020 to support their growth strategy. We expect to see an increase in funding conversations as firms look to build a war chest for investment and quickly responding to opportunities as they materialise over the course of 2021/22.

M&A advisors to professional services firms and legal technology companies.

David Sparkes

David Sparkes