Technology and Law Firm Mergers

by Edward Poll, J.D., M.B.A., CMC

We seem to read more and more about law firms merging with one another and about larger firms gobbling up mid-size and boutique law firms. These mergers, both large and small, raise many challenges along the road to success, and most of these challenges are people-related. Clear and direct communication without hidden agendas by all the parties is required for a successful merger.

When these mergers occur, one of the more significant front-line issues is "Which firm's technology will survive?" When there is a merger (buy-out) by a large firm of a much smaller law firm, the answer seems obvious. But, when there is a merger of equals, or of larger firms, even if not equal in size, the answer is not so clear. And, where there is a merger of small firms, things get murkier still.

What may be worse is that frequently, the question is not even considered before it is too late to make a smooth transition. This article will focus on the technology issues in the merger, however, the same approach and thought processes can and should be considered in every area of a merger of law firms, irrespective of size, including technology, personnel policies, pay scales, etc.

There are 10 critical factors that the leaders and management of law firms should consider during the discussion and transition phases to assure a successful passage and profitable picture after the merger.

1. Look at the firm culture.

2. Have both firms prepare white papers.

3. Create a team to develop and implement a technology plan.

4. Create a "client" survey.

5. Place all purchase decisions on hold until after the merger takes place, otherwise there will be duplication of expenditures and of equipment.

6. Think about how you are going to merge your accounting policies.

7. Integrate the financial data of the acquired firm into the new system.

8. Carefully review the compensation issue.

9. Consider the importance of training and education.

10. Focus on knowledge management.