Din: Increasing demand
The pace of consolidation in the legal market could increase after the funder that owns Simpson Millar launched a facility for law firms that want to grow through acquisition.
Doorway Capital said its shelf facility would help law firms that have “traditionally found it difficult to gain access to the M&A market due to a lack of additional financial resources”.
The facility is fully underwritten and documented but only becomes live when the law firm has found a target.
The funder said it was responding to increased demand, with M&A broker Acquira Professional Services reporting that more than 60 acquisition deals have already completed in 2023, before the spike that always comes at this time of the year, with many firms still renewing their professional indemnity insurance on 1 October.
Doorway founder Steve Din said: “Over the last 18 months, law firms have increasingly asked Doorway for a funding commitment under which they are not having to pay interest and other charges until they actually want to draw on that funding.
“The catalyst for this is, undoubtedly, the desire for law firms to make acquisitions and ensuring acquisition funding is available to be drawn, often, at very short notice.”
Abdul Hussain, chief executive of AWH Solicitors, a consolidator firm that has used Doorway backing for acquisitions, said: “It means that we can secure access to additional funds when we find a suitable investment opportunity in the M&A market without having to wait on credit approval.”
Doorway’s funding also backed the 2020 merger between Moore Blatch and Barlow Robins.
Jeff Zindani, managing director of Acquira, added: “I anticipate law firms having considerable interest in this type of facility. The legal services market is witnessing a significant volume of M&A deals and this shelf facility will certainly accelerate the pace of consolidation.”
Research published last year by Acquira found that 57% of law firms were actively seeking acquisition or merger opportunities, 23% were already in talks over an acquisition or merger, and the remaining 20% were considering whether to look for an acquisition or merger.
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