Law Firm Mergers

Foreword 7
Peter Zeughauser
Zeughauser Group

Acknowledgements 11

I. Understanding the flywheel effect 13

1. Introduction 13
2. Some firms are pulling away from the rest in size and momentum 14
3. Compounded growth is a crucial factor 16
4. Within a peer group, larger and more profitable firms have important advantages 17
5. The prospect of a merger can force a firm to address problems 17
6. The risk of doing nothing also has to be weighed 18

Management perspectives 22

II. Designing a strategy around strengths 29

1. Formulate a strategy that extends existing strengths 29
2. Take a hard look at your firm 30
3. Identify opportunities to exploit 31
4. Look for firms that share your strengths and aspirations 32
5. View the issue through strategy 36
6. It pays to be patient 36

Management perspectives 37

III. The special perspective of the smaller firm 41

1. Staying small has drawbacks, however 41
2. The cost of doing nothing is not nothing 43
3. There are tangible advantages to scale 43
4. How to begin evaluating the option 45
5. What to do if you want to go forward 46

IV. Missing the window, or not 47

1. Perform an honest self-evaluation 47
2. Signs the window could be closing 49
3. Standing still carries risks 50
4. Addressing weaknesses 50

Management perspectives 51

V. Taking the driver’s seat 53

1. Being reactive carries risks 54
2. Agree on criteria and frame the discussion around those 54
3. Consensus on the criteria lays the groundwork for a deal later 56

VI. Drawing up the list 57

1. Framing the initial criteria 58
2. Conducting the first screen 60
3. Profiling the most appealing candidates in depth 61
4. Prioritising your targets based on your criteria and feasibility 62

VII. The approach 65

1. Do your homework and gauge your audience 66
2. Dealing with the sceptics 70
3. Keeping quiet and preparing for leaks 73

Management perspectives 74

VIII. The second meeting and beyond 75

1. What to ask for 75
2. Start fleshing out the upside 78
3. Develop a process and a timeline 78
4. Identify make-or-break issues and work through them 79
5. Voice concerns and state priorities, not demands 81
6. Start planning how to communicate with clients 82
7. Be flexible about the legal structure 82
8. Think creatively 82
9. Avoid flipping a switch that will leave someone in the dark 84

Management perspectives 85

IX. Getting partners’ approval 89

1. How to structure a vote 91
2. How to deal with vocal opposition 91

Management perspectives 93

X. Making the deal a success 95

1. Frame a shared strategy 96
2. Build momentum 96
3. Develop and track but-for revenue 96
4. Foster and measure cross-firm collaboration 97
5. Compensate partners for fulfilling the merger goals 97
6. Leaders set the tone 97

Management perspectives 98

Notes 101

About the authors 102

About Globe Law and Business 104