Leading consultants are predicting a ‘surge’ in mergers by small firms over the next 12 months.

A six-monthly survey carried out by consultant Andrew Otterburn (pictured) on behalf of the Law Consultancy Network, seen exclusively by the Gazette, has revealed a 69% increase in the number of approaches made by, or to, firms in relation to mergers.

While 45 approaches were made between July and December 2009, this rose to 76 approaches in the first six months of 2010.

The survey, completed by 55 firms with a median size of eight partners, mostly outside London, showed that 82% had considered the possibility of merger, takeover or amalgamation in the first half of 2010 – up from 75% in the last six months of 2009. Of these, 28% said they had a good chance or definite plan to merge with or take over another firm in 2011, while 37% said it was possible.

Otterburn said: ‘The survey confirms what I have seen in the market in recent months; that there has been a huge increase in activity with relatively few mergers actually taking place. The next two years, by contrast, will see a surge in the number of mergers and acquisitions actually taking place as the market consolidates following the Legal Services Act.’

Viv Williams, chief executive of law firm consultancy 360 Legal Group, said firms recognise the need to consolidate, either to remain financially viable or to become more competitive. He added that sole practitioners and two- to three-partner firms would have the greatest need to merge.

Earlier this month, research by Winmark’s network for managing partners indicated a high level of consolidation to come among larger practices.