If the name M+K Lawyers is not yet familiar to you, take note of it and take a closer look. This firm does not aspire to the glamour of the top tier but beneath the modest exterior lies a business strategy which apprehends perhaps better than most the future direction of the Australian legal services market.

M+K, or Macpherson + Kelley as it is also known, grew revenues by 29% last year, largely through organic growth and the pursuit of the SME market. Originating in Melbourne, the firm has expanded into Sydney and most recently Tasmania, courtesy of a merger with local firm Dobson Mitchell & Allport. The merger means that M+K will now have 115 lawyers, 41 of whom are "principals", the firm's partner equivalent. Plans are afoot to build a national presence.

On one level, there is nothing unusual about the story of a mid-size firm growing through a merger. Indeed, Stephen Knight, Dobson Mitchell's chairman of directors, told ALB it was to some extent inevitable. "The cost of practice is enormous and only getting worse. I suspect the cost of running legal practices has risen out of proportion to the returns to the practices," he said. "It means a lot of smaller mid-size firms will not be able to continue as they are - they either have to downsize or get big and get critical mass so they can pay their overheads more easily. The guys in between will continue to suffer. There will be continuing changes in the profession."

The consolidation of the mid-tier is a familiar story which ALB has followed since the days when firms such as Herbert Geer and Thomson Playford made their first tentative interstate forays. The new element which M+K adds to the narrative, however, is the emphasis on the SME space.

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