How to Measure Whether a Merger is Successful

The first measure of success is the degree to which the merger has moved the combined firm toward achieving its strategic goals and objectives. It is important to understand that merger is not a strategy, but a means of implementing strategy. This difference is critical.

A firm’s strategy must be driven by clients and practices. The likelihood of a successful merger is higher when firms have identified and agreed upon their long-range business goals and the steps necessary to achieve them. Each firm should be able to articulate why merger will help them achieve their long-term vision and improve on their ability to serve clients. Also, pursuing merger is usually much easier to sell to the partners when they understand it is part of the firm’s strategic plan. If there is enthusiasm for the business rationale for the merger, it is much easier to overcome the structural and deal points that might otherwise derail the discussions.

Once the strategy has been defined and business goals have been clarified, a firm may find that a merger with the right partner would provide the combined firm the proper platform for achieving its goals and objectives. In some mergers, the strategic fit and expanded platform is obvious. In others, it may not be as obvious, but is often there. It is important to keep in mind that a merger may be the first step in implementing a strategy, and that ultimately success will come when the firms have integrated and can move forward as a single firm.