21 November 2008

New rules concerning merger and acquisition (M&A) deals that are set be introduced in June next year are likely to affect lawyers already feeling the pressure to reduce fees.

The International Accounting Standards Board has announced that M&A fees must now be logged as separate expenses rather than included as part of the whole cost of the deal.

This will mean that in deals worth millions of pounds the amount spent on lawyers and accountants must be properly accounted in a separate list and will become more transparent for clients to scrutinise.

According to Mark Spinner, head of corporate at Eversheds, the new regulations will mean clients will drive a hard bargain.

"Lawyers need to sharpen up their budgeting. The days of telling clients 'sorry it was more work than we expected' are over," he told the Times.

However, PricewaterhouseCoopers recently claimed that UK law firms are in a strong position to survive the economic downturn, with many companies reporting record results this year.