But with the increasing interest in law firm mergers comes an increase in ill-conceived and poorly structured mergers. Too often, firms enter into merger discussions for the wrong reasons, fail to carry out a thoughtful, disciplined analysis of the prospective deal or make fundamental mistakes in structuring the new combination of firms. As a result, while some firms are merging with success, many others are finding that their mergers are failures.
A common issue arising when firm leaders negotiate a merger for the first time on their own is that they assume law firm mergers work like most client mergers.
Many a corporate lawyer has commented, “I do mergers every day of my life, and I can negotiate this deal in my sleep.”
The reality, however, is that law firm mergers tend to have far fewer financial issues and far more complex people and structural issues than other corporate mergers. Unlike most client companies where the machinery doesn't have the option of getting up and walking away if the new corporation's new strategy, structure or leadership doesn't work, the operating assets in a law firm are people who can leave if they don't like the new arrangement.