With an uncertain economy, increasing costs and competition, it is not just Allen & Overy and Shearman who are contemplating a merger; many more modestly sized law firms in the UK legal sector are once again having a look around the market. In this short article, Jonathan Blair, Head of WBD Advisory - the Professional Services Advisory Group at Womble Bond Dickinson - considers the ten most important issues to think about when contemplating a merger.
1. Merger is not a strategy
Obvious perhaps, but worth being clear about this right from the outset; merger is an execution route in pursuit of a vision or a goal, but is not a strategy in itself. Receiving a call or email suggesting the proverbial 'coffee' can be flattering, and potentially distracting, so be clear about whether a merger really does further the vision of your firm.
2. Be clear about the rationale
To be able to know whether a merger supports the delivery of a vision presupposes that a firm has a vision in the first place. Having a vision is essential. If a firm does not, then how do you know where you are going, and which routes are the right ones for you?
3. Process is just process
If you do begin the difficult process of getting to day one of a newly merged business, be wary of letting the process take over. At the end of the day, it is 'just a process' and you will get there – or not – and if you do, the process will become part of ancient history. What really matters is remembering why you are engaged in the process in the first place – you will need to remind people of this when you hit the inevitable bumps in the road.
4. Culture and personality
Yes, culture really does eat strategy for breakfast. It is no good bringing together two firms with incompatible cultures. All firms are different and being clear about how different, before you walk down the aisle together, will save a whole lot of pain after the event.
5. Be clear about the red lines
You may think you don't have many red lines...until you realise you do. They might be to do with the remuneration structure or leadership or plans to open offices. Whatever they are, take time before a discussion begins to work out what they really are.
6. It's (not) all in the name
A name might be a red line. Names tend to have history, and therefore strong emotional attachment. They also tend to be associated with power and who is really taking over who, but down the line memories fade, new people join and time moves on.
7. Timing matters
Mergers are potentially very disruptive and can be hugely distracting. They need their own time but that doesn’t mean the other activities such as promotion rounds or budget planning within the firm should stop. Think carefully about your firm's calendar of events and only move what you really, really need to. Whatever that is, make sure it isn't the remuneration review.
8. Pick the leadership team early on
Mergers are always unsettling times. Exciting for many, yes, but worrying for others too, and being clear early on about who the leadership team is going to be will help calm nerves., including those in the leadership groups.
Because many will feel unsettled, the single biggest asset in any merger discussion is communication. Talk to the partners, talk to everyone, listen to the concerns, tell them what you can.
10. Integration planning
Day one of the new firm will come and go. Hopefully it will be an exciting day and a day people will remember and if you have done your integration planning thoroughly it will be, because two teams have now become one, and you are all on the same P&L. A carefully thought through integration plan will make that all important first 100 days much smoother.
Jonathan Blair is the Head of WBD Advisory, a professional practices advisory business within Womble Bond Dickinson LLP. Jonathan heads up the firm's London office and is part of the firm's international development group. Prior to this, Jonathan was the firm's Managing Partner for 14 years from 2008 to 2022 and in that time lead the firm from its origins in Newcastle as Dickinson Dees, through its merger with Bond Pearce in 2013 and combination with US firm Womble Carlyle to create Womble Bond Dickinson, a transatlantic law firm with global revenues of over £350m.