Delivering the growth agenda

Unless underlying organic growth can be delivered at a faster rate than the growth of the cost base then any organisation will face challenges. Without sustainable organic growth, options are limited – accept lower profits, become uncompetitive in the race for talent, choke investment in infrastructure, or reduce the equity partner base. None are palatable or sustainable in the longer term. Of course, pursuing inorganic growth through merger or acquisition is a route pursued by many firms to square this circle of economic slippage.

Yet all firms sit on very significant untapped potential within their existing client base. Developing strategies to unlock that potential is a core part of our service mix. Through better relationship management, effective key account programmes, service penetration and development strategies, improved pricing, and better financial hygiene, every firm has the ingredients for improved business performance at its disposal.

Merger or acquisition is an alluring option for many firms as a means of fulfilling their growth objectives.

The challenge will always be to avoid a ‘greasy pole’ strategic outcome – creating a larger organsation, making one-off cost base savings, but not addressing any of the fundamentals which will mean that the new organisation simply finds itself in the same position as its antecedents a few years down the line.

It is increasingly common for firms to seek mergers or acquisitions as a means of fulfilling their growth objectives. Hedley Consulting has extensive experience of advising on the merger or acquisition option and working with firms to identify, evaluate, negotiate, and implement opportunities.  Ensuring that the combined firm takes the best from its antecedents, as well as using the Trojan Horse opportunity afforded by the merger itself, is central to our advisory role.

We act for both senior and junior parties as well as, increasingly, on a joint-engagement basis to facilitate negotiations and to develop the business model for the new firm, ensuring that it takes the best from each antecedent organisation as well as being informed by current best practice.

Our engagements typically arise from one of three sources:

1. As an output from a strategy review on which we have advised and which has identified the merger route as the best way of achieving the firm’s strategic objectives;
2. Through a direct approach from a firm seeking a merger partner, where our initial role will often be to identify, evaluate and introduce potential candidate firms;
3. An invitation from firms already in discussion which require an expert advisor, facilitator or “honest broker” to assist their process or to address a specific issue.

Our advice can be high-level, amounting to no more than a few days of strategic advice, or of a retained-advisor nature, guiding a firm through the entire process, depending on the specific situation, objectives, and requirements of each client.

Hedley Consulting is a founder member of ALFMA, The Association of Law Firm Merger Advisers, which brings together deep industry experience, wide knowledge and leading practitioners to advise on every aspect of the merger process.

Sustainable, peer-group leading profitability is a consequence of getting other things right. It is an outcome of getting our strategy correct in our context, aligning our people, bringing about change successfully, and being rigorously single-minded in implementation.

In the short-term there are also several actions that most firms can implement to improve profitability and cash-flow so creating the ‘financial headroom’ to instigate wider change initiatives.

We advise on, and assist in the delivery of, profit enhancement measures in the short, medium, and longer term.