If you’re looking to expand your law firm’s geographic reach or portfolio of services, you might be thinking about the benefits of a merger – and the many steps involved in making that happen.
New letterhead, new website, new people – those are just a few considerations when attempting to grow your practice through merger. While firms may have different ideas about how to prioritize the many components of a merger, most managing attorneys or CEOs will tell you that your clients should always be at the top of the list.
Controlling the message
It’s no secret that firms are reluctant to talk about pending mergers. But inevitably, someone is going to get wind of the news and tell the press or tweet about it to a worldwide audience. If you lose control of how news of your merger is released, your clients may wonder if your firm is the proverbial sinking ship.
Melanie Green, chief client development officer for the newly merged firm Faegre Baker Daniels, said that only a small group of upper-level management was involved in initial merger talks between Baker & Daniels and Minneapolis-based Faegre & Benson. Once the firms agreed to the merger and informed employees of that decision, they worked quickly to manage the news.
“We knew that with two firms making those announcements internally, that would quickly spread to other audiences,” Green said.
The firms acknowledged publicly that they were discussing a merger but released few other details. And management asked lawyers at both firms to call clients and let them know what was happening.
“So we took a pretty one-to-one approach,” Green said.
Phil Bayt, chief managing partner for Ice Miller, said that before the firm announced its merger with Columbus, Ohio-based Schottenstein Zox & Dunn, it had a thorough plan for disseminating the news.
“Well in advance of announcing the combination we developed a comprehensive internal and external communications strategy that included all our key stakeholders,” Bayt said. “Obviously, communicating the great news to clients was a top priority, and we did so through personal meetings, phone calls and email communication.”
In November 2011, Jay McAveeney joined Bingham McHale as chief operating officer. In that role, he helped prepare the firm for its merger with Greenebaum Doll & McDonald, headquartered in Louisville, Ky.
McAveeney had been involved in mergers before, but he said the partnership that formed Bingham Greenebaum Doll was the first “merger of equals” he’d helped oversee.
“The ideal scenario is you try to hold off on an announcement until after the merger is approved by the respective firms, and I say that only because the success rate or the rate that mergers are actually consummated is not that high,” McAveeney said. “The hard part though is keeping it hush-hush. At some point, if it does get out and it hits the press somehow, you have to be ready to deal with that.”
Finding the right match
If your law firm lives for casual Friday, you probably don’t want to merge with a firm that strongly believes lawyers should always wear suits. In love, opposites may attract, but the same is not true for law firms.
Tom Froehle, chief executive officer for Faegre Baker Daniels, said that Baker & Daniels spent a lot of time thinking about what it wanted in a merger. Faegre & Benson seemed to be a good match – its practice areas like life sciences and corporate transactions were both areas that Baker & Daniels identified as desirable in its own growth, and both firms placed equal emphasis on diversity. But Froehle said that even when firms seem to have similar cultures, the true test of compatibility is how people get along face-to-face.
Baker & Daniels budgeted for travel so management could meet in person with decision-makers at Faegre & Benson and decide whether they all seemed to agree on general management strategies.
“That really is important – that personal interaction and spending a couple of days with people who you are likely to be working with,” Froehle said.
Patience is also a factor in finding a good match. When Sommer Barnard announced in 2008 that it would merge with Cincinnati-based Taft Stettinius & Hollister, the firms had been discussing plans for two years, said Bob Hicks, partner-in-charge of the firm’s Indianapolis office. More recently, Taft Stettinius & Hollister announced a merger with Chester Willcox & Saxbe, based in Columbus, Ohio, a plan that had been in the works for several years, Hicks said.
“So the old adage, ‘good things are worth waiting for’ is very much true when dealing with something so critical as a major law firm merger,” he added.
You can probably wait until later to figure out how you’ll manage to provide enough coffee for a staff that just doubled in size, but some issues require more immediate attention.
Green said that Faegre Baker Daniels had new business cards and letterhead ready to go on Jan. 1, the day the merger became effective. The new website was launched immediately, too, as it had been in development for three months.
“We definitely had the benefit of some time to get those things done … but that’s not a general way of how all combinations come together,” Green said. Some firms may not have enough lead time to get a new website ready to launch by the merger’s effective date, she added, but they can find temporary solutions. That’s what Bingham Greenebaum Doll did.
McAveeney said that new email addresses were ready for use at the beginning of the year, but the website will continue to be revamped.
“The website – the way we’ve done it is we now have both our legacy URLs pointing to a merged firm website. It’s really just a landing page, but from there, you can click through to the legacy web site,” he said.
Combining two firms with multiple offices while minimizing employee stress takes some finesse. And being forthright with attorneys and staff may help ease concerns.
“You communicate honestly, regularly and openly,” Hicks said. “Employees fear the unknown. It is the job of firm leadership to eliminate as much of the unknown as possible.”
McAveeney said with any merger, the key to employee satisfaction is making sure any new or changed responsibilities suit each person.
“That’s a delicate dance, if you will. It starts with not necessarily new employees, but in getting the right people in the right roles,” he said.
Despite management’s best efforts, some people may choose to leave a firm after a merger, especially if they fear their jobs may be eliminated.
“Part of the decision making that needs to be done is when you’re integrating, you have redundancies, and do you eliminate the people in those positions? But that’s usually a little bit down the road before you have start making those kinds of decisions,” he said.
Whether a merger is successful depends largely on how firms define success. Profit is just one marker of success, as far as McAveeney is concerned.
“It all centers around servicing existing clients with a broader platform, so my idea of success is when a legacy Greenebaum Doll & McDonald client is now worked on by a legacy Bingham McHale attorney in Indianapolis that Greenebaum wouldn’t have had access to in the past,” he said.
Green said that internal harmony and ensuring that clients feel their needs are being met are two critical elements of any merger.
“Because law is a people business,” she said.•