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Jun 04, 2025

Law Firm Merger – What Should We Discuss in our First Meeting

Question:

I am a partner with two other partners in an estate planning firm in Seattle, Washington. All three of us are in our late sixties and contemplating retirement in the next few years. We have no associates in our firm and have been unsuccessful with retaining associates over the years. Therefore, we feel that we will have to either lock the doors or find a suitable firm to whom we can sell or merge with.

We have identified a candidate firm with a sole owner and two associates that might be a possibility. We have scheduled a first meeting but we are unsure how we should approach the discussion. We need some talking points.

We would be very appreciate as to your thoughts and suggestions.

Response:

Here are questions to ask/raise during the first meeting,

  1. Your firm
    1. Your retirement goals and timeline.
    2. Your preference – firm size.
    3. Discuss how your firm could be a growth opportunity for the other firm.
    4. Discuss people in the firm (attorneys and staff), backgrounds, ages, and what each does and who would probably stay and remain with the firm post you and your partners retirements.
    5. Discuss practice mix, percentages of revenue.
    6. Methods of billing – time bill, flat fee. Billing rates.
    7. Discuss revenue history.
    8. Malpractice ins, coverage.
    9. Does your firm retain original estate plan documents? If so, where?
    10. Business philosophy.
  2. Other firm
    1. Other firm’s goals re continuing to practice, growth, practice area focus, etc.
    2. How many years does other firm members plan on continuing to practice.
    3. Discuss people in other firm – attorneys and staff, ages, time with firm, etc.
    4. Other firm’s status with office lease if leased or if building owned – mortgage, etc.
    5. Discuss practice mix, revenue past five years, percentages of revenue by practice mix.
    6. Other firm attorneys experience in your practice areas – estate planning, estate admin, business law, municipal.
    7. Methods of billing – time bill, flat fee. Billing rates.
    8. Malpractice Ins, coverage.
    9. How are associates and staff compensated. Method and amount of pay.
    10. Business philosophy.
  3. Next steps.
    1. Explore any potential conflict of interest.
    2. Dependent on first meeting, other firm’s lease, level of interest, etc.
    3. If both parties believe there is a possibility, usually another meeting – getting to know each other socially and well as others in the firm or firms – cultural due diligence. If this does well – financial due diligence – 5 years tax returns and profit and loss statements and balance sheets for 2024, A/R reports, compensation for attorneys and staff, owner compensation, billable hours, billable rates, copies of malpractice insurance policies and application, etc.
    4. If due diligence does well, one of the parties makes a written proposal.
    5. Sometimes a pilot ‘Of Counsel” arrangement can be done prior to a merger. I have a client that is using an Of Counsel arrangement with another law firm to handle all of their estate planning with the senior partner announcing that he will not take on additional clients.

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John W. Olmstead, MBA, Ph.D, CMC

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