In a newly posted piece, Casey Sullivan‘s Law Firm Mergers Reach Highest Point in Nearly a Decade reports that 2016 is to be yet another record year for law firm mergers.   As the cascade of announcements show (as well as the Altman Weil research compiled in its Mergerline), merger as a law firm strategy has gained in popularity since the legal industry shakeout of a few years ago. Among many of the mergers are a number of smaller ones in which the size of the firms involved are less than 35 lawyers. The fact that merger is not just reserved for the bigger firms is evidence that firms across the size spectrum find the idea of combination compelling.  With merger being an idea that is not abating, is it time for your firm to merge? Before you answer “yes,” there are certain things to consider.

Deciding whether to combine law firms requires intense analysis. Besides the usual metrics of revenues, expenses, headcount, practice expansion and the like, law firm leaders face intangible issues, such as whether disparate practices can coexist, whether some clients’ incompatibility precludes their being served under one banner, or whether strong personalities can get along. These issues can be tough to resolve and it takes a great deal of work to sort through them successfully.

Other issues should not be so tough to assess. In fact, there are certain issues, danger signs if you will, that augur against any combination if they cannot be resolved with adequate certainty and confidence. If these danger signs surround the potential merger target, it may be time back away from merger or look for another candidate.

No Integration Plan Exists. One of the most difficult tasks in trying to make two law firms or practices come together successfully is how they will live together. Different systems, philosophies, core values and strategies can’t wait to be resolved later. If you don’t know how you will work out these issues, you should not combine. Even worse, if you have not taken the time to identify the issues, you are not close to being ready to combine.

The Firm Cultures Clash. Law firms often describe their culture in reverential tones that connote a gratefulness that it is not like other firms. The “other firm” likely feels the same way. No one firm culture is the best any more than one expensive golf putter is better than another. But understanding the cultures of the two firms walking down the isle is vitally important, and if you don’t know how the two cultures will mesh, turn around and walk back out of the church.

Prior Lateral Growth of Your Target Has Been Significant. If your target has grown recently through significant lateral acquisitions, be wary. Most laterals arrive with a book of business that is easily re-packaged and moved to another firm. If you are counting on a lot of that laterally acquired business staying, you may be disappointed.

Your Merger Target “Needs” to do the Deal. We all like a good deal-that is our nature. But if a potential combination candidate seems desperate to do a deal with you, there likely are fundamental problems under the surface that have put it in such straits. It is a little like buying a used car from the salesman that won’t let you leave the lot without making a deal. At the time of sale he knows something you don’t. Weeks later, when your clunker won’t start, you know.

Rate Structures and Practice Sophistication Are Dissimilar.  “Once we started talking, we were surprised at how similar our firms were.”  If the press release is not “merger-speak” and management of the two potential merger candidates truly believe such a statement because it is true, a merger may be beneficial.  But if the gulf between the two firms’ rate structures and practice sophistication is substantial, compatibility is suspect and integration issues will be significant.

There is too much at stake to combine law firms when danger signs about the combination are obvious. Common sense should steer you away from many combinations. For those possibilities that remain, in-depth analysis should provide the kind of guidance needed to avoid mistakes and make a successful combination possible.

What other reasons should cause you to walk away?