BIGNON DE KEYSER
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BIGNON DE KEYSER
is an independent consulting firm specialising in strategic, management and organisational consulting, dedicated to legal professions.
 

NEWS
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November 2015

Should  I  be  open  to  merging  my  law  firm  with  another  firm ?

The answer is simply yes. Of course this does not mean that a merger will be the best possible outcome for your firm ! What it means is that in today’s economic environment and global context, law firm mergers can make a lot of sense. You want to understand whether it also makes sense for your firm and, if it does, how you can turn it into a success. 

Changing environment

One has to be blind not to spot the changes that are affecting  law  firms.  Clients  are  seeking  more  specialized legal  advice  and  litigation  support.  Clients’  needs  are becoming more global. Clients wish to pay less for commodity  services.  New  niche  firms  and  global  players  are growing.  The  Big  4  have  re-entered  the  legal  market.  At the same time technology and effective knowledge management  are  no  longer  a  luxury,  but  essential  tools  to-wards success for law firms. Marketing, social media and visibility are critical. New alternative players and different business models to partnerships for law firms are being tested…

In this environment it is fair to say that most firms will lack a  number  of  answers  to  these  challenges.  Only  when  a firm has taken the time and done an honest analysis of its strengths and weaknesses in this changing context, will it be able to identify the real priority areas for future development. Such analysis will also bring and help identify a number of actual opportunities for the firm. All these will ultimately need to be aligned with a firm’s strategic direction. This homework of knowing what your firm requires to most successfully move forward in this changing environment is to be done well before you start looking at merger opportunities. It is required to ensure you have a solid set of criteria that will help you choose between what are real opportunities and what are distractions, or even worse, a waste of time and energy. Many firms will benefit from the help of an outsider to facilitate this process. 

Does a merger make sense for your firm ?

Once  you  have  done  your  homework  as  outlined  in  the previous  paragraph,  the  next  question  arises  :  How  to most efficiently realize these priorities for development ? This is when the merger question will arise. Will a merger help me realize these priorities faster and better than by not merging ? Will a merger bring me new issues that may neutralize the benefits of a merger ? What are the alternatives to a merger, such as alliances or networks ? What will happen if you do nothing and simply continue growing through  internal  promotion  and/or  lateral  hires  ?  To  answer these questions, you need an open mind and accept that teaming up with others may make you more successful. You will want to test the various options in light of the defined priorities. If a merger is to be considered, you will also want to test every possible merger candidate in light of your priorities. It requires a professional and fact-driven approach to select and score possible candidates. In addition,    it  requires  a  clear  articulation  of  your  strategic direction.

Once  you  have  done  your  homework  as  outlined  in  the previous  paragraph,  the  next  question  arises  :  How  to most efficiently realize these priorities for development ? This is when the merger question will arise. Will a merger help me realize these priorities faster and better than by not merging ? Will a merger bring me new issues that may neutralize the benefits of a merger ? What are the alternatives to a merger, such as alliances or networks ? What will happen if you do nothing and simply continue growing through  internal  promotion  and/or  lateral  hires  ?  To  answer these questions, you need an open mind and accept that teaming up with others may make you more successful. You will want to test the various options in light of the defined priorities. If a merger is to be considered, you will also want to test every possible merger candidate in light of your priorities. It requires a professional and fact-driven approach to select and score possible candidates. In addition,    it  requires  a  clear  articulation  of  your  strategic direction.

Mergers fail, how to I avoid this ?

They fail too often, but that does not mean that they necessarily have to fail or have to be overly painful. Assuming that the  preparatory  work  has  been  done  well  and  the  merger helps  realize  faster  priorities  for  your  firm,  success will  de-pend  on  how  well  the  change and  integration  is  managed. You should assume that your firm does not have the experience or means to do this. In other words, the hard work of facilitating the integration and change will not stop with the announcement of the merger. For mid-sized firms in not too many locations, our experience teaches us that it will take up to 2 to 3 years before the merger is fully absorbed and one firm with one culture and one vision is realized. It will also take up to that time to benefit from all the responses to the challenges and priorities that have been identified.  You will be required to make dedicated resources available for this integration. It will consist of a number of project leaders and people being formally made (partially) free to work on these projects. If there are more than 3 projects in connection with the merger and integration, you will also require an overall program manager who will oversee the projects and processes. There is a cost attached to all of this and you should take it into account when deciding or not upon a merger. 

So in conclusion ?

To merge or not is a question that you will want to address, but only after your firm has done its homework of defining its vision and its priorities in light of a changing environment. If a merger may make sense (which it will in the overwhelming majority of cases) you will need an objective process to score potential candidates. You will want to check if merger candidates  help  you  realize  your  priorities  more  effectively.  If  it does, and you are convinced the other firm and its partners share your vision, a merger will bring you real benefits. For the merger to succeed, you will require time and resources to lead the projects of change and integration. They will not only ensure a successful merger, but an optimal realization of your projects. There is a cost attached to this and it should be factored into the overall costs of a merger. Should you be convinced,  do  not  hesitate  to  contact  us.  We  would  be pleased  to  help  you  navigate  through  this  in  the  most  efficient and successful way.

Steven De Keyser
november 2015



ARTICLES:





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