What lies behind the sudden increase in solicitors firms merging? Is it a need for personal partner security, succession or future proofing, fear of failing or a strategic move to build a successful business?
2013 has revealed a weekly supply of dramatic news impacting the legal profession. Jackson reforms, loss of legal aid, liquidations, economic position and client migration, inability for partners to plan ahead, ABS’s and the increasing impact of the Legal Services Act, succession issues for traditional partnerships, professional indemnity renewal……they have all combined to place the profession in new uncomfortable territory.
One consequence of these issues is the fact that there are now far fewer firms in England & Wales than at any time recorded by the Law Society.
As at September 2013 there were some 10,726 firms to be precise. It still sounds like a big number but as reported in the LSG it’s 400 less than the same month in 2012. This dramatic fall is due to all of the above factors which have resulted in:
The rather worrying state of affairs has created a rather tense atmosphere within many firms as they find themselves glancing around to find security against the pressures, the security of a merger partner.
It’s the merger activity that is of particular interest because if well thought through and executed it can deliver a very positive outcome to counter the weight of negativity surrounding the profession. Unfortunately the press releases with smiling partners shaking hands in front of newly branded and dressed offices are unlikely to convince many onlookers of the true drivers of such arrangements.
When partners start to feel the cold and their accountant or bank has that “little word in the ear” they see the one route to securing their future as that long discussed but never acted upon merger opportunity.
The firm nearby that presents less of a threat to personal control than others with domineering partners. The firm that has the client you’d always courted but failed to land. The firm who’ve just announced an investment in IT which must mean they’re “switched on” and looking to the future. The firm that hasn’t joined a national brand in a vain attempt to protect its future flow of work.
It’s not surprising that the above traits are seen as attractive to the partners of a firm keen to link arms with another. Regardless of whether it’s an arranged marriage or one that all partners consent to willingly, the success of the union will not be founded in any of those considerations but could certainly result in its failure.
As with any successful marriage having things in common helps but is not essential. Yes you need an attraction, a spark and a personality match that uses the “chemistry” to good rather than toxic effect. When joined the “personality” of the newly formed business must be a commonly shared persona. If not the deal can be blown wide open leaving space for detractors, conflicting agendas and negative views of those who were just waiting for the “I told you so” moment.
Leadership is critical and it doesn’t necessarily need to be a single person more often a team who share a vision driven by clearly stated and understood objectives.
The original cupid arrow that created the merged business is typically founded in solid logic and should have all the ingredients for a successful outcome. Unfortunately the complexity and challenge of putting organisations together can dilute and lose the benefit of economies of scale and combined resources.
Critical to the success is a clearly articulated strategy delivered consistently by an effective leadership team. The focus at all times MUST be on the customers, lose sight of that key fact and matters can start to unravel fast.
Rather than being daunted by the scale of the challenge it’s helpful to view the merger plan as a series of projects that each need to be worked on to achieve the overall desired outcome.
Not many employees relish change and mergers present plenty of new challenges and potential threats to personal job security. Keeping the talent engaged is important as is the need to motivate the business to achieve the new goals.
There are many positives to be borne from mergers but before being charmed by a suitable partner it’s worth looking at theirs and other track records. We can and should certainly learn from the mistakes of others and the legal market is peppered with them.
On the upside mergers can and do deliver, but best look at an equation that gives 1+1 = 3+ not 0. This is a marriage that needs to deliver offspring that can grow and evolve and take the newly formed business forward.
Here below are a list of projects, an example of the areas a typical merger would need to cover to deliver a positive and co-ordinated outcome. The list below is but a guide and is not comprehensive. The projects would of course be determined by the specific features of the merger.
Merger Projects Example
If any of the above issues resonate with you and your business and you would wish to explore your options please feel free to drop me a line in confidence – firstname.lastname@example.org
i2i Business Solutions, Management Consultancy
email@example.com twitter @davidlaud
A few years ago a client turned to me after a meeting and said he would hate to have my job. At the time and as you might expect this took me by surprise not least because the individual making the statement was himself a very successful lawyer and partner in a successful firm and actually the meeting had been very positive.
When asked to qualify why my role might present as a poisoned chalice to him he referred to the constant pressure to deliver results. One winning strategy or campaign would never be enough and that there was a constant demand for positive outcomes borne out of successfully winning work from the competition.
That might sound a bit odd certainly now we’re in such a competitive climate and expectations for delivery are not only directed at the marketers but each and every facet of the business.
What’s interesting is that this conversation stuck with me over the years. The reason is that it made me, for the first time, seriously question my own career path and if indeed the suggestion of unrelenting demand for results would make for a happy working life in the long term.
The reality of course is that there are stresses in everyone’s job from CEO, entrepreneur, director manager, homemaker, carer, doctor, parent, journalist you name it there’s pressure to be found. We can all question ourselves as to our performance, relationships, success and failures and when times have been tough with the economy many of us have been hard on ourselves or had others make unrealistic demands leading to unnecessary stress.
When I have a bad day and let’s face it we all have them, I revisit that conversation and remind myself why I do what I do and why over the years it’s proven to be a good career choice. That technique helps keep me focussed on the positives and avoids dwelling on negative thoughts that can seriously damage your working life MOJO. We all need a healthy dose of self-belief and confidence but it can be a greater challenge when events really turn against us and at those times a little external help might be required.
Questioning our own abilities can be caused by our mood and often the actions of others which can frequently be outside of our control. That doesn’t stop us worrying and spiralling into a feeding frenzy of stress as we think back to the minutiae of our working days or projects in a negative post match analysis that either finds you coming up short or blaming everyone else for their failures.
How do you overcome these thoughts and loss of confidence?
Wherever you are in your career, just starting out, at a mid-point crossroads or towards the end you deserve to be making the very most of that time you spend on it. Re-discovering your MOJO, the element which drives you, makes you stand out from the crowd and defines who you are can provide the all-important spark to re-ignite your work life. It can also help you realise your ambitions and life goals by providing a fresh focus to the time you’re spending at work and your priorities and more effectively counteract those negative forces.