MakingLawFirmsMergersWork:SixIngredientstoHappyMarriage

ByDonaldE.RobinsonandDanSafran

InPrideandPrejudice,EnglishnovelistJaneAustenwriteshappinessinmarriageisentirelyamatterof
chance.Anyonewhohasventuredintotheworldoflawfirmmergersmightagree.However,inour
viewtherearestepsyoucantaketohelpensuremergerhappinessisnotlefttochance.Thesesteps
areevenmorecriticaltoday,whenmorefirmsareexploringmergersasapathtogrowthandthe
backdropofaslowereconomyservestohighlightanymissteps.

Ifyourfirmispursuingthemergerpathasagrowthrecipeforyourfirm,considerthesefiveingredients
tosuccesswhichareespeciallyrelevantintodaystryingeconomictimes.

BeforewedigintotheTop6ingredients,weshouldcaveatthelistbyrecognizingthatitisnota
completerecipe.Mergersarecomplexandkeydimensionsalwaysincluderesolvingquestionsaboutlaw
practicestrategy,practicegroupintegration,conflictschecking,financialsystems,document
managementsystems,ITnetworksandapplications,andmanyotherissues.Butinourexperience,the
sixlistedbelowaretheingredientsthatcanmaketherecipepalatable,ifnottastefullydelicious.
Mergerhappinessisthekeymeasureofsuccess.

Ingredient1.Aclearlyarticulatedstrategy.Whydoyouwanttomerge?Howwillitaddvalue
forthecapitalpartnersinthefirm?Whatwillwelooklikeoncecompletelyintegrated?
Certainly,manyaspectsofthesequestionsaretypicallyaddressedthrough
diligenceandthecourtingprocess.Butarticulatingtheanswersandcarrying
WhyThisDeal?
themintotheintegrationprocesswillhelpfueleventualsuccess.Answers
needtobemuchmorethanthetypicalpartylinesinevitablyendupasa
Answersneedto[gobeyond]
partofthedealpressrelease.Instead,askwhatspecificevidenceof
thedealpressrelease.Instead,
successwillwelookto3yearsfromnowtoindicatethedealweare
askwhatspecificevidenceof
contemplatingwasagoodone(assumingwechoosetodoit).
successwillwelook[for]3

yearsfromnowtoindicatethe
Ingredient2.Carefuldiligence.In2008,theU.S.andGlobal
dealwasagoodone?
economiesturnedonadime.Oneimpactisthatatnoothertimehaspast
performance(e.g.,2008billingsinparticular)beenapoorerindicatorof
futureperformancethantoday.Withanycontemplateddeals,itismore
importantthanevertogetunderthecoverswithaneyeonwhatliesaheadfor
yourpotentialmergerpartner(notwhattheyvedoneinthepast).Trends,pipeline,
practicefocusandthehealthoflongstandingclientsallbecomeimportantrequestsinanydue
diligenceeffort.

Ingredient3.Candoronculture.Whentimesaredifficult,thenerveendingsoforganizational
culturegetexposed.Differences(whicharealwayspresent)aremagnifiedandcanballooninto
fullfledgedretentionissuesandbusinessdistractions.Theseneedtobeaddressedheadonand
overtly.How?IdentifythekeyculturalattributesthatareapartoftheDNAofbothfirms(isit
billinghoursexpectations?Feestructuresandbillingpractices?Rewardsystems?Client
ownership?Secretarialratios?)andthenmakedecisionsonwhatthenewfirmwantstobe,
rememberingallthewaythroughthatculturesarenotrightorwrongbuttheyjustare.

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Ingredient4.CoordinatedCrossselling.Thecostsideofdealsiseasy.Findingsynergiesin
PracticemanagementandAdministrationmanagement(i.e,HR,Finance,Information
Technology,Marketing,andFacilities)typicallybearsfruit
iffirmleadershavethefortitudetomakethehard
decisions.Thegrowthsideofthemergerequation,
CrossSellingMustBeEngineered
however,isalwaysharder.Achievinghypotheticalsynergies
CrossSellingisanoftpromised
thatareenvisionedtocomefromcrosssellingareelusive
benefitthattypicallyyieldsfew
andmanyhurdlesbeforetheycanbetrulyrealized.Sohow
results.Attorneysdonotcrosssell
doyouincreasethechancesofsuccessonthisfront?Inour
naturallyanditwonthappenby
experience,focuseddiscussionsthroughthoughtful,
preparedsessionsandfacilitatedconversationsthatare
shearosmosis.Instead,firmsneed
latersupportedbygoodreporting(i.e.,measurementsand
toengineerspecificdiscussionsand
dashboards),arewhatmakescrosssellingareality.With
followupto:
oneclient,PLAsconsultantsspentadaywithover40
1) Identifytheprioritycross
partnersinthetwocorporatedepartmentsofmergingfirms
sellopportunitiesand
andidentifiedcrosssellingactivitiesthroughstructured
breakoutsessionsforeachpracticearea(litigation,
relationships
transactions,bankruptcy,patentandtrademark).The
2) Solicitcommitmentand
result?New,trustbasedrelationshipsamongpreviously
buyintotheprocess
skepticalpartnersandidentificationofover30crossselling
3) Introducetrackingtoolsand
opportunitiesthatcouldbemonitoredforprogressona
thereportingprocessto
manageprogressuntilit
singledashboard.
becomescultural

Ingredient5:QuickDecisionsonOrganizationStructure.
Onlythencanfirmshopetorealize
Oneuniversallessonlearnedfromourlawfirmmergerand
results.
corporatedealexperienceisstraightforward,but
exceedinglydifficultinpractice:CoLeaderarrangements
dontwork.WhetheritiscoCEOs,CoPracticeor
Departmentheads,orCoExecutiveDirectors,thestructureinevitablyendsupimpeding
progress(atbest)andmorelikelydamagesthevalueofthecombinedfirm.Inamerger
situation,itisbettertosimplychoose.Suretherearedynamicsthatmustbeconsidered.And
manyfirmsshouldtaketheopportunitytoupgradetalentbylookingoutsideforakeyrolethey
needtofillwhenneitherincumbentissuitedforarolethatmaybebiggerandmorestrategic
afteracombination.However,wevefoundthatspeedandthefastremovalofuncertainty
aroundrolesareparamounttomergersuccess.

Ingredient6:DefinegoalsandMeasure,Measure,Measure.Withoutdiscretegoalsdefined,
howtoyoumeasuresuccess?Ifyoudontmeasure,howwillyouknowthatthemergerwasa
success?Oneofthekeystocreatingvalueinanydealishavingthedisciplinetostepbackand
answertwokeyquestions:1)3yearsfromnow,whatevidencewillweleanontoprovethe
mergerwasasuccess?and,2)Whatarethe6to10thingsthathavetobefinishedbeforewe
cancalltheintegrationcomplete?Thesecriticalquestionsneedtobeaskedearlyintheprocess,
longbeforethenoiselevelofintegrationbeginstoimpairyourabilitytothinkclearly.Isitcross
sellingrevenues,practiceprofitability,revenueperpartner,costgoals,clientsatisfactionallof
theabove?Arewedonewithintegrationoncefinancialsystems,practicegroups,networksand
facilitiesandthebrandsareintegrated?Onceset,progressagainstgoalsandtheintegration
finishlineneedtobereviewedatleastmonthly.Similartotastingthecombinedingredientsas

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theyaremixedandbegintocook,measuringprogresstowardgoalscanhelpensureresultsare
realizedasplanned.

Asmentionedattheonset,mergersarealwayscomplexopportunitiesforlawfirmmanagementto
navigate.Theabilitytomanagethroughchallenges,seebeyondthepoliticalandemotionaldimensions
ofanydeal,andmakedecisionsquicklyisimportant.Ifyouareabletostirintheabove6ingredientson
yournextdeal,chancesareyouhavearecipeforasuccessfulandfulfillingmarriage.

DonaldE.RobinsonisanExecutiveVicePresidentatProjectLeadershipAssociates(www.projectleadership.net).
ProjectLeadershiphasfocusedonhelpingcompaniessuccessfullyexecuteandgetresultsfrommergersand
acquisitionsfornearlyadecade.RepresentativeclientshaverangedfrommidcapcompaniestoFortune50
organizationsinavarietyofsectors.RepresentativeclientsincludeChicagoMercantileExchangeandtheChicago
BoardofTrade,AndrewCorporation,Pfizer,LondonLifeInsurance,MarsInc.,RRDonnelley,and3M.Donistheco
authorofAftertheMerger:TheAuthoritativeGuidetoIntegrationSuccesspublishedthroughMcGrawHillin1997.
HehaswrittenseveralarticlesforpublicationsthatincludeMergerandAcquisitionsAJournalforDealmakers,HR
Magazine,ExecutiveExcellence,andM&AChicagoandhasbeenquotedinpublicationsincludingCIOandFortune
Magazines.Heisafrequentspeakeronthetopicsofmergers,acquisitionsandstrategy.

DanSafranisanExecutiveVicePresidentatProjectLeadershipAssociates(PLA)andfocusesontheLegalIndustry.
DanworkswithmanyofPLAs350LawFirmandCorporatelegalclientsprovidingbusinessstrategy/execution
direction,operationalexcellence,softwareapplicationandoveralltechnologysolutionstoourlegalclientsthough
PLAsmixoflegalindustryexpertsandPLApracticeandclientexpertise.Hehasspokenatnumerousindustry
conferencesandauthoredwiderangingarticlesaroundlegalindustryissuesandsolutions.Danhasheldpublicand
privatecorporate(andlawfirm)positionsasCIO,COOandPresidentandbringspractical,actionableexpertise
throughhisdirectanddeepPLAknowledgebase.

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