Firm Mergers: How Lawyers & Accountants Can Prepare

Firm Mergers: How Lawyers & Accountants Can Prepare

June 2, 2022

There is only one way to eat an elephant: one bite at a time.
— Desmond Tutu

Mergers are the result of an infinite number of things, but law and accounting firm mergers tend to come in a few common flavors:

  • Older owner winding down,
  • Defeated younger owner closing down, or
  • Ambitious, like-minded owners sharing a vision

The factors in the merger influence the importance and timing of certain events, as well as who is going to be responsible for seeing the actions through.

✅ The Money Must Make Sense

Money expectations need to be aligned upfront. I work with folks who can help you review your books (your own or the acquisition target), but I am going to assume you have already done your due diligence (and if not I can connect you with somebody who can help here).

Assuming your finances are settled, just know that you will need to recalibrate those expectations frequently during and after the merger. For example, if an employee is inherited from the merger and is not performing up to standards, the financials may need to be recalibrated.

✅ You Take It One Project At A Time

Firm mergers take time. You don't integrate a group of zealous, if not obstinate, compliance-focused professionals in one weekend. You do it one set of systems at a time when you have the luxury of time and cooperation.

There's undoubtedly a looooooot of systems that will need to be merged, refined, or upgraded, such as:

  • Contact Management Systems (i.e. CRM, referral systems, conflict checks, etc.)
  • Knowledge Systems (e.g. Notion, Westlaw, Fast Case, etc.)
  • Project Management Systems (e.g. Rocket Matter, Clio, etc.)
  • File Management Systems (e.g. Google Drive, iManage, 2FA, scanners, etc.)
  • Productivity Systems (e.g. Microsoft Office, Google Workspace, Adobe Acrobat, etc.)
  • Communication Systems (e.g. MS Outlook, Google Calendar, Slack, etc.)
  • Talent Systems (e.g. ATS, Performance Reviews, titles, etc.)
  • Media Systems (e.g. Website, social media profiles, etc.)

So, by one project at a time, I mean no more than ~3 projects per department. Ideally it'd be one project at a time but the reality will be that a few things often need to get done on the same timetable. Just don't fall into the trap of trying to do everything at once.

✅ You Work Through Who Does What

Invoices will be one of the most forceful communications you have with new and existing clients re: merger so focusing on how that messaging will play out, and who is delivering it by when, is going to be critical.

But before you even get to updated invoicing regarding the merger, you need to get everyone on your now-expanded team on the same page.

✅ You Communicate To Your Team

A merger is just as much a people thing as it is a system and processes and administrative and everything else thing. Put the people first and you'll have a smooth merger in my experience. The best of the systems and money and motivation will follow.

Let The Teams Know ASAP

Announcing the merger internally as soon as you can. Even before its final, let senior team members know what may be coming so they can start clearing room and cleaning up.

  • Clearing room: Utilization rates is such an amazing metric. Like all metrics, utilization rate is a bit mushy but at the very least the folks using these barometers can start being more selective with projects, etc.
  • Cleaning up: Onboarding new employees is immensely difficult. Especially when its less acquisition and more merger. So, cleaning up systems, policies, etc. is a necessary undertaking.

✅ You Communicate To Your Clients

If you don't want to break the news via invoice then you need to get out a communication — email and in print, but via phone call or meeting preferably. Advice on invoicing and legal software is below.

Right now, we're still thinking in people terms so we want to send a dedicated something to our clients to explain where all that money they send us is going. So pairing the price tag of everything next to it may not be what you ultimately want for this communication.

Rebranding: ~12 Months of Brand Equity Before Total Takeover

Every brand has some kind of goodwill attached to it. But I can safely tell you that regardless of how good that goodwill actually is, a safe rule of thumb is that within 1 year you need to consolidate your branding.

You can take baby-steps here, employing temporary branding solutions for the first few months while you repeatedly communicate with clients via calls, emails, invoices, social media campaigns, and other means. But eventually you need to roll all your efforts under one brand.

✅ You Compare Systems

You need a checklist to immediately start prioritizing:

  • systems coming up on renewal, and
  • systems about to run on conflicting / redundant cycles (e.g. billing software).

You can duplicate or download a brief system checklist here. If you have any questions or suggestions (e.g. sharing my comprehensive checklist) then please feel free to reach out to me.

✅ You Follow the Money

Again, there's few things more important than the money. You have redundant costs like previously mentioned, but you will also likely have write-offs and other administrative debt to sort through when looking at somebody's books with a fresh set of eyes.

You Go Through Old AR

This is the first and most obvious place to look.

Immediately, your mind may go to "who is the biggest deadbeat?" but what may be more important is determining who are the exceptional clients that need to be provided something beyond your usual level of service. You may pride yourself on "everyone gets the same level of white glove service!" but that's an ideal that is never truly realized.

You Update Fee Agreements

Newly merged firms mean newly updated fee agreements — for prospective and existing clients. Refining thesse documents takes a long period of time, but it's critical to roll everyone over onto your new agreements on a uniform effective date.

You Review Expenses Again

And then you review them again and again and again. Or more ideally, you have deputized somebody to do this for you because if you are a professional and you are still unable to trust universal administrative tasks like these then I'm unsure how you will ever be able to focus on the forest that you just purchased.

✅ You Realign Org. Chart

This is one of my least favorite parts — navigating the political geography of two recently joined-at-the-hip organizations. The left hand needs to know what the right hand is doing kinda stuff and it often means handling egos, unpacking informal processes, and otherwise formally calibrating everyone's progression patch. It's miserable.


Team members who previously had autonomy in decision-making will want to retain that. And with more team members means more decision-making so you may need to elevate some folks or otherwise make clear their role in the decision-making process.

1:1 Meetings

These are the simplest, most effective managerial tool you can possibly be doing. And given the difficulties of autonomy overreach and uncertainty because of the above, you can map out these relationships and better route difficult-to-vocalize issues resulting from the merger.

The conversations from these meetings are great for sifting through the minutiae from the major priorities, and often it's that nitty gritty that percolates up into a major mess if not properly addressed by decision-makers supporting you.

✅ You Do All Of This 10x Over Then Once More

This is not comprehensive (obviously). These are simply some of the most common things to consider when merging a professional firm. So, if we're thinking about them here, then you need to be thinking and discussing these items 10x more within your workplace. It may seem like overkill but with mergers and any other important task you need to trust but verify.

✅ You Invest in Knowledge Management

Do you plan on continuing to grow after the merger?I

If so, and I can't imagine why you wouldn't, then documenting the newly refined processes in a referencable place (e.g. Notion, like my checklist above) will allow you to more easily train new employees while also pointing to current process with your newly merged teams of employees.

Knowledge management often ends up being on of the last things people think about, but it can be one of the most productive uses of your teams time.

If you have questions on knowledge management or any of the other considerations for firm mergers, then feel free to schedule some time with me here.

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