The most important piece of advice for law practices merging with another firm is to plan. Plan to succeed and fail, but most of all, allow the project to be flexible. It can be hard to put together an extensive strategy where every scenario has been thought out, as surprises can crop up unexpectedly. When they do occur, you’ll need to respond quickly and it’s imperative that you have an organisation or governance that allows you to react in the right way.
When preparing for a merger, there are generally six areas which need careful consideration:
Financials
There are two parts to cover in the financial planning of a merger:
- Generally, we don’t like to talk about money, but when one firm is merging with another it needs to make good business sense. Make sure there is financial planning in place because above all else, merging with another practice costs money.
- When two firms merge you would expect there to be financial benefits, so the firms involved should list any business synergies in order to highlight potential financial gains or cost savings.
Clients
The merger also needs to make sense from a client perspective. For instance, at Ellisons we’re very client-centric, so when merging with Gross & Co. our top priority was to make sure that our clients wouldn’t be affected. We also made sure that Gross & Co.’s clientele are and will continue to be provided with the same service that Ellisons’ existing clients enjoy.
It’s advisable to look at services too, and if there are any new services that can be introduced, how they can be cross marketed between the merged firms.
Compliance
In order to provide quality services to clients, you need to ensure that the merged firm’s past and current work is and continues to be compliant, and at Ellisons this is something we achieve through risk management and due diligence. Once you’ve considered the potential risks, particularly the risk of future claims, you’ll need to decide how the merged firm will be insured going forward. This would involve your professional indemnity insurance, and your broker or the SRA can advise you on the matter.
People
The word you want to avoid hearing when going through a merger is ‘uncertainty’. Along with a changing organisational and management structure, it’s human nature to feel uncertain about your future with a firm which is going through a significant change. However, as a merged firm, you want to ensure that employees come together in a unified way and bring their client relationships with them. It’s imperative to manage any uncertainty by communicating with employees regularly, answering any questions they may have, and ensuring that everyone on both sides of the merger is kept well-informed and knows what is happening.
Technology
Technology is an enabler for any law firm and it’s never practical to run two separate systems. If you need to integrate two different systems, plan it carefully and take steps to ensure that the process is as efficient as possible, that all employees are given the correct training if required, and most importantly, that it complies with regulations such as GDPR.
Communication
This section of your merger plan houses three key areas which need to be taken into consideration: Internal communication; External communications and Marketing.