Efforts and courage are not enough without purpose and direction. – John F. Kennedy
It seems not a week passes without an announcement of another law firm merger. A report last week of a rumored combination of Morgan Lewis and Bingham McCutchen caught my attention.
The posting in Above the Law suggests that the partners of Morgan Lewis may be less than excited about the possible transaction; but, “… the lure of becoming one of the five biggest firms in the world is hard to resist.”
I hope that isn’t the real driver behind the deal.
There are a number of solid strategic reasons for law firms to consider merging. In my opinion, three of the best include:
- The addition of specific expertise and technical capabilities necessary to better serve existing or targeted clientele;
- Succession planning; and,
- Financial stabilization.
I have been encouraged by the fact that two recent mergers our firm was privileged to consult on were specifically driven by succession concerns. In each case, senior partners made the strategic and selfless decision to seek a culturally compatible merger partner in order to provide a platform of future opportunity for its younger lawyers.
Unfortunately a significant percentage of mergers are driven solely by a desire to get bigger.
Why do I say “unfortunately”? Isn’t growth a good thing?
Simply put — I believe the numbers-driven strategy is the root cause of a majority of failed merger initiatives. Getting bigger often only compounds existing deficiencies.
Is your law firm considering a merger? If so, what is driving it?