“More Mergers Mounting”
by Alisha DiGiandomenico
Merging or acquiring another firm? You’re not alone. In 2017, there were a record number of law firm mergers as firms looked for ways to better serve clients, increase market share, and position themselves more competitively.
But reaping the rewards of a merger requires carefully managing a number of risks. Even as momentum builds, the reality is that mergers often fall short in delivering business success. KPMG reports that nearly 70 percent of all mergers, acquisitions, and takeovers in North America fail to add shareholder value, and industry observers note that law firm mergers generally fair no better.
For law firms, the consequences of a poorly managed merger can be extreme. Without a well-defined integration plan, firms are often ill equipped to manage the risks associated with mergers. Underestimating the time and resources required to integrate two firms can delay the realization of expected synergies, reduce lawyer and staff productivity in the short term, and undermine employee morale. Diminishing returns can trigger partner departures, and in turn lead to the loss of major clients.
On the other hand, the successful integration of two firms can deliver significant benefits to clients. Mergers provide firms with the opportunity to expand their geographical reach, as well as their practice and sector expertise, and achieve efficiencies that enable them to deliver better services faster. The combined firm’s operational leadership can play a critical role in merger integration success.
No two firms or mergers are the same, but there are lessons to be learned and advice to be shared.
Over the past 16 years, we’ve worked with a number of firms, helping them plan and execute the strategic and operational issues that arise prior to, during, and after a merger. That experience includes merger readiness, conflicts review and “Day One” planning, as well as operational execution and support covering IT integration, business intake alignment, information governance and vendor/cost management.
To learn more about the lessons we’ve learned and the advice we have to share, get in touch: