If your law firm is considering a merger, it is a perfect time to evaluate the operating cost associated with the combined organizations.

Mergers are risky transactions. Having operating costs in line will decrease pressure on the new entity.

Although all costs should be evaluated, we will focus on three areas in this post. Two represent areas where you should be able to realize a reduction in expenses (space and people), and one is an area where you should plan for a budget increase (business development/advertising).

Office Space

The cost associated with housing a law firm is typically one of the two largest expenses for firms. There are, of course, two key drivers in this discussion — the amount of space, and the cost per square foot.

On the first count, in recent years firms have found ways to decrease the amount of space required. Some of the efficiencies offered by technology combined with less spacious partner offices are among the big factors here. Reports suggest that over the last decade or so benchmarks for space have dropped from 900 square feet per lawyer to closer to 600.

But what about the cost per square foot? Thanks to landlords, this one is out of our control — right? Or is it?

There continues to be what I suggest is a false perception that firms need to be located in the very areas where rates tend to be highest. The inclination remains to lease space in the heart of the central business district, or the hottest new area of town in the newest building.

While many law firm leaders tend to view the cost of premium space as the price of doing business, the increasing reality is that this space is of little to no relevance to virtually any client.

As you begin planning for the combination of your firm with another, look hard at how you can realize some space efficiencies as part of the transaction.


The second area of significant cost for law firms is the direct and indirect cost associated with attorneys, paralegals and staff. In virtually every law firm combination, there are redundancies in one or more of these areas.

As you plan for the integration of the two firms each of these human resource areas should be evaluated for redundancy, improved efficiency, and effective client service and support. When two firms become one, the goal is to end up with the strongest organization possible. This means reassuring the best and weeding out the weakest.

Keep your eye on two periods, the “time of transition”, and the long term. Personnel needs are greatest during the transition period.

People decisions are difficult, and critically important. An open and honest approach to assessing the needs of the new firm will serve you well.

Leveraging the transaction

An area that you should consider making additional investment is market awareness. The quickest way to leverage the value of a merger is to ensure that existing, former and prospective clients know of the new capabilities resulting from the transaction.

This awareness comes about through a well-planned communication initiative. The project starts with the development of a clear and concise message, which reflects the enhanced value created by the merger.

The delivery of the message will vary by situation; but generally your plan should include, face-to-face meetings with key clients, direct mail, electronic communiques, and announcements in relevant professional publications.

Have you engaged in a thorough review of the cost structures as you plan for your merger? Do you have a well designed communication plan to let the relevant sectors of the marketplace in on the increased value you now represent?