Why merge your law practice?
Before answering this question, perhaps we should define “merger.”
An amalgamation between firms or companies of similar size in which either the members of the merging firms exchange their shares for shares in a new firm or body.
The merger of two or more law practices is the equivalent of a business marriage. A merger must never be thought of as the magic solution to existing problems; more importantly, it should not be contemplated in bad times, after all, who would want to merge with a practice which is in distress?Does any business situation create more tension than the joining of two distinct organisational cultures into one? A thoughtful merger integration process will help ensure that the combined operations create greater value than the individual organizations working independently. The merger process can be an exhausting and gruelling experience. It can be stressful for the principal/partners/directors/members, making employees nervous and clients cautious. Finding the right merging partner, covering all the potential problem areas and keeping everybody on side is far from simple.
However, if management are willing to consider the merger path, the possibilities can be not only exciting but also lucrative:
- Expansion of specialist departments and money-spinning niche areas
- The ability to attract lucrative commercial work – and thus charge higher fees
- Increase market share and client base
- Increase the workforce, employ quality fee earners; larger and well-appointed premises in an improved location
- Improved IT systems
- Increased profits to distribute by being cost effective and enjoying economies of scale
The downside to a merger can be:
- Losing a slice of independence
- A faster pace of working life i.e. everyone may have to ‘run faster' to meet the requirements and expectations of an increased client base
- “Cultural” conflict – office politics
- Acquiring ‘dead wood.'
If you have weighed the pros and cons of a merger and wish to proceed, then choosing the right practice with the most favourable terms is essential.
Fail to prepare - prepare to fail; avoid the pitfalls of a merger!
The process of a merger can be overwhelming. It certainly isn't an easy process and should never be pursued without ample preparation, planning and thought. The key is to find the right partners, approach them without risking damage to your business and ultimately secure the right deal. Law Mergers & Acquisitions will help identify a suitable practice that is “in tune” with your business ethos. We act as a third party intermediary.
Mergers are, quintessentially a growth strategy. With patience and persistence, the rewards are tremendous. Follow a solid plan, consider each step carefully, and reap the benefits.
