Law Firm Mergers: Good, Bad, or Unpredictable Effects?

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Anonymous User
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Law Firm Mergers: Good, Bad, or Unpredictable Effects?

Postby Anonymous User » Tue Dec 06, 2011 6:57 pm

Thoughts on the effects of recent law firm mergers? http://blogs.wsj.com/law/2011/09/01/mer ... legal-biz/.

Just today, mergers were announced between: Bryan Cave and Holme Roberts & Owen; and Arnold & Porter and Howard Rice Nemerovski Canady Falk & Rabkin. http://blogs.wsj.com/law/2011/12/06/mor ... ward-rice/.

For those seriously considering or that have accepted offers at combining firms, is a merger simply good, bad, or more likely uncertain news?

imchuckbass58
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Re: Law Firm Mergers: Good, Bad, or Unpredictable Effects?

Postby imchuckbass58 » Tue Dec 06, 2011 7:43 pm

I think it's mixed and really depends on the specific situation. I know that's a cop out, but that's really what I think.

So the undeniable negative about all law firm mergers is you will have integration issues. The two cultures are likely different, and there will probably be a bunch of partner departures due to compensation issues, disagreement over strategic direction etc. There may be dissatisfaction over the internal systems (training, review and promotion, etc.) as people try to adjust from what they're used to to the new way of doing things. This generally makes for a less ideal working environment culturally and interpersonally speaking, though how bad it will be really depends (can be pretty bad - e.g., see Dewey Ballantaine/Leboeuf Lamb and McCrae, or O'Melveny and O'Sullivan).

The other big negative is there will likely be people getting pushed out. Mostly staff layoffs, but underperforming partners from the weaker firm will likely get gently shoved out. Associates probably won't be cut wholesale, but if you happen to be part of a practice group or habitually work for partners that fall out of favor, that can bode ill for your future prospects.

But there are positives. Usually, there's usually a stronger/bigger and a weaker/smaller merger partner. The rationale from the weaker/smaller firm's perspective is clear - get financial stability by tying yourself to a big firm, and get more national/international exposure to top-tier clients through a bigger office network. For boutiques, it also helps by bringing in different practice areas so you can more fully serve clients, cross-refer work, etc. From this perspective it's usually a pretty big positive compared to trying to go it alone.

The stronger/bigger partner usually does the merger to fill a "hole," or to poach a group of top-flight partners. So the A&P/Howard Rice merger was because A&P was struggling to build a west coast presence organically. O'Melveny-O'Sullivan was driven by O'Melveny's inability to organically build a top-flight corporate practice and bring over some marquee clients. I guess from an associate's perspective this doesn't really matter much, unless you're in one of those offices and/or practices.




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