We are a small six attorney litigation firm. We have two partners and three associates. One of the partners wants to retire within the next five years. The other partner will continue to practice for another 10-15 years. We love practicing law and consider ourselves to be very good lawyers. However, we find firm management and administration to be a challenge and we are not skilled in this area nor do we want to be. We have a good book of business and clients. Recently, we began discussing the possibility of merging with another law firm. What are your thoughts about firm's like ours merging with another law firm?
Obviously, merger or acquisition of law firms is becoming more and more commonplace. Hildebrand is projecting 44 mergers (firms with five or more attorneys) in 2007. However, research indicates that 1/3 to 1/2 of all mergers fail to meet expectations due to cultural misalignment and personnel problems. Don't try to use a merger or acquisition as a life raft, for the wrong reasons and as your sole strategy. Successful mergers are based upon a sound integrated business strategy that creates synergy and a combined firm that produces greater client value than either firm can produced alone.
Right reasons for merging might include:
I would start by thinking about your reasons for wanting to merge and your objectives. Ask yourself the following questions?
Make sure that you look for a complimentary fit. Since you are weak in firm leadership, management and administration – look for a partner that is strong in these areas. Strong leadership, management, and administration may be hard to find in a firm under 25 attorneys.
John W. Olmstead, MBA, Ph.D, CMC