Law Firm Mergers -- How to Make Them Work, Part 4: Integration

Editor’s Note: The author of this post is a partner with the law firm Blank Rome and previously headed its business department and served as Finance partner. This is the fourth and final article of a series he is publishing on Big Law Business about how to successfully execute a law firm merger. You can read Part I , Part II and Part III .

By Barry H. Genkin, Partner, Blank Rome

In the past few weeks, I’ve covered the staple considerations that should lead discussion, planning and execution of law firm mergers. Once these critical factors have been resolved, the final element, planning for integration, must be addressed and tended toduringmerger discussions — and then for months following consummation of the deal. In a sense, the easy part is getting the deal done — the hard part is its execution.

The most successful law-firm mergers always implement comprehensive integration plans that combine painstaking attention to detail with thoughtful implementation tactics. Combining large groups of people in a work setting poses a myriad of challenges; the integration plan is meant to assure a smooth transition. The benefits of a merger — from back office efficiencies to greater combined legal competencies and business development prowess — will be realized more quickly when a thorough integration plan is successfully implemented.

The integration process should start as soon as both sides feel a high level of confidence that a deal will get done. A team should be assembled to lead the effort, and its members should include staff from finance, HR, technology, conflicts, billing and collection, facilities, and marketing. This group should meet every two weeks during the later stages of deal discussions, and then weekly as the closing date approaches, with meetings continuing for three to six months after closing, or however long leaders think it’s necessary to achieve a seamless consolidation.

The integration team will coordinate all operational aspects of the merger, from which software programs will be retained, to how existing and new-client servicing will be enhanced. Two point people should be assigned to post-merger operations: one who handles systems and related staff issues, and another whose duties center on creating a welcoming environment for the lawyers of the acquired firm and dealing with lawyer and practice related matters.

Among the first things the integration team should examine are the IT systems at both firms. Often, the acquired firm will transition to the systems of the acquirer, unless the acquiring firm is looking to make an upgrade, which does happen. After the merger, redundant systems should be kept in place for a time while tech teams complete their transitions. This is especially important for billing, collection and finance functions. Computer assets — laptops, mobile phones and desktop machines—should see no down time. The goal is to keep the technical transition from interfering with the lawyers’ work. To that end, computer training and orientation should occur as soon as possible after closing (or immediately before), preferably on a weekend, so the new lawyers can make as seamless a shift as possible, with as little down time as necessary. The goal is for the merger to have as little effect as possible on the firm’s primary product: billable hours.

The acquired firm’s lawyers should be supplied with a who-to-contact list, so that all questions are easily and quickly handled by the right person on the acquiring side. Again, creating a welcoming atmosphere is key; mergers with rocky transitions can create morale issues that can translate to lower billable hours and less than optimal client service.

Perhaps the top priority throughout all integration processes: avoiding the loss of business or confidence from any client. Timing and client messaging is critical, as well as an articulated plan regarding billing rates. It’s not acceptable for clients to hear about the combination through the press. A careful and precise plan to inform each client of the merger should be executed before the union is formally announced; firms should be prepared to answer questions about whether billing rates will change.

When some time has passed after closing, key members of the transition team should gather for a post-mortem to discuss which parts of the integration went well and which ones can be improved upon in the future. For growing law firms, mergers offer a powerful avenue for growth. Executing them smoothly is an acquired skill that creates a competitive edge.