February Edition 2023

27 Any merger will be the result of mix of reasons, discussed and debated (often in secret) by a law firms' partnerships. We don't pretend to have access to the most secret concerns of law firms' top brass, but in our view, there are key drivers for why law firm mergers happen: going global, going national, entering new markets, practice expansion and economics of scale. Among the reasons for mergers, there are: 1. Increased geographical reach – many firms may want to expand their combined reach into regions and jurisdictions where their clients operate. 2. Increased sector presence – a firm wants to diversify the practice areas it already covers and combine the synergies of the two firms Each firm wants to be a true one stop shop. This means having a Tier 1 practice in all key practice areas including Israeli Corporate and M&A, International Corporate and M&A, Hi-Tech, Real Estate, Litigation, Tax, Labor Law, IP, Environmental Law and ESG, Antitrust and more. Many firms have practices in all of the above areas but not Tier 1 in all areas. 3. Improved market position – a firm wants to solidify its position and it will strengthen its position by joining with another, to increase its potential when bidding for the most sophisticated work. In addition, diversification in changing markets is key: A larger firm has a more diverse practice, so it is less dependent for example on strong hi-tech, strong capital markets, changes in real estate etc. 4. Attracting Talent: The legal market is working hard to attract and maintain talents. Many young attorneys prefer to move to hi-tech companies, others prefer to work as in house counsel, each firm wants to hire top students and retain them for many years. Mega firms have a better chance of attracting and retaining top talent. These mergers, while they come with many challenges, present a raft of opportunities for young attorneys – such as access to different types of work and new clients; enhanced learning and development opportunities. 5. Another key driver is economics of scale. A larger firm can provide a large conference center, strong marketing, strong finance team, strong HR teams and more general services for the firm wide platform. While there can be many benefits to lawyers and clients, a 2016 blog from LexisNexis discussed the importance of managing the process carefully. It says: “Some firms focus too heavily on operational issues – eg, billing and