Leading your firm through merger

With recent news that Pinsent Masons and McGrigors are to merge and that Salans and SNR Denton are now in merger talks, it seems that 2012 may be the year for law firms to get hitched.

But of course in any merger the declaration of intent is only the beginning of a long and difficult journey to effectively integrate firms. And the people management issues involved in creating one firm out of two can be the trickiest part of getting a merger right. 

You see it all too often at the bottom of merger announcements in the press: anonymous comments posted by disgruntled lawyers and other staff who feel disenfranchised by their firm’s decision to merge. Some of those may stick around to see how things pan out; but others may start looking for their firm’s emergency exit.

The merger partners risk losing invaluable talent when it is most needed – through change. But mass departures can also damage a firm’s reputation making it harder to attract new talent.

A successful merger is dependent on the support and willingness of people across both firms to knuckle down and make the partnership work.

Given that a merger can also cause such uncertainty, though, how can law firms help get these critical people management issues right? The following five tips provide some food for thought:

• Communicate, communicate, communicate. Merger discussions are by nature secretive, but try to avoid a situation where your staff finds out about your imminent merger from the trade press. Inform everyone as early as possible, and keep communicating with staff throughout the process. If practices and/or jobs are vulnerable, then be honest and let affected people know as soon as possible. A degree of uncertainty through merger may be unavoidable, but that shouldn’t mean that people are left completely in the dark.
• Clearly lay out the strategic vision of the combined firms. If you have taken a lead in the pre-merger negotiations, then you will undoubtedly be excited by the opportunities the merger presents. But it may be some time yet before you have the rest of your firm with you. If for years you have asked for your lawyers’ loyalty to one brand, don’t be surprised if some now seem reluctant to give it up. Especially when it’s for a merger over which they had no control or negotiating power.
  
  A clear vision of the merged firm, together with a detailed explanation of its strategic goals and the roadmap for achieving them, may help you win firm-wide support and keep top talent on side. 
  In the long run, the clearer the proposition of your newly merged firm, the easier you will also find it to attract the most talented lawyers to your business.
• Create as many opportunities as possible for people to get together. In any merger, there will inevitably be a period in which the members of each firm eye each other up nervously. Many will resist interaction at every opportunity – preferring to stick with what they know.
  
  The quicker you can find ways to break the ice, the better. Organise cross-practice get-togethers and social events; get people involved in committees to support the integration; get a tennis tournament going. Do whatever you can to get people talking and collaborating. 
• Encourage discussion and then listen to it. Don’t just assume you know what your people think. Provide plenty of opportunity for your lawyers and other staff to voice their concerns and ideas, and then really listen to what they are saying about your merger as it progresses. 
  
  Firm-wide one-to-one meetings with departmental heads may seem obvious, but less common might be opening a communication channel direct to the management board of the combined firm. This might be achieved in the form of a one-off intranet forum in which the leadership team makes themselves available for questions for an hour or two.
  
  Alternatively, an intranet could be used as a dedicated merger tool – providing people with all the latest information on the merger, as well as giving staff a platform to discuss key issues of importance. Such an outlet could even help generate ideas that will prove key to supporting the change process.
• Deal with departures sensitively and honestly. Few mergers go through without any casualties. Some will leave of their own accord, others will be made redundant as their practices and/or roles no longer align with the firm’s strategic goals. Mergers can also be viewed as a prime time to ‘trim the fat’ meaning that anyone deemed to be underperforming can be at risk.
  
  Whatever the cause for the departures, the need for sensitivity is obvious, not only for those leaving but also to ensure you don’t send your ‘survivors’ packing too.

Consolidation in the legal marketplace is only likely to increase in months and years ahead. But while a merger can be a quick means to achieving critical mass, many mergers underperform or fail altogether to achieve their aims.

When one of the major factors determining merger success or failure is the ability to achieve cultural integration, agreeing your people-management strategy early should be paramount to any merger process. This isn’t just because you need to keep your own people on side, but because the way you treat your people through merger will also be critical to shaping external market perception of your newly merged firm.

Do it well, and you should be able to look forward to attracting the very best talent for years to come.

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