By Tsuey Shan Halford
As merger discussions between Clyde & Co and BLM have kicked off a round of speculation about a new wave of consolidation in the legal sector in 2022, Byfield Associate Director Tsuey Shan Halford sets out the particular challenges of choreographing law firm M&A communications and explains how law firm leaders should make best use of their teams throughout.
Mutual understanding, common values, shared goals and aspirations of future (financial) growth – all signs of a successful marriage. But hold the phone because we’re not talking about a love marriage, we’re talking about a strategic marriage between two law firms.
The legal landscape is strained with the ongoing pandemic, the relentless war for talent, the challenge of addressing employee needs and the increasing sense that the current deal boom cannot last forever. If the economic picture for professional services does darken in 2022 it is a racing certainty that there will be consolidation in the market. Even if revenues hold up there are strong drivers for mid-market mergers.
So, in a potential merger scenario, what do law firm leaders need to have in mind from a communications perspective?
Plan. Then plan some more. Management teams can be so busy looking at the business case of a merger and getting partners on-side before a partnership vote, that the comms can almost be an afterthought. We’re here to tell you that the first set of communications about any potential merger will set the tone of what unfolds, so it is crucial that you have very clear messaging around the rationale for what you are doing ready to go.
Give your comms team a seat at the table. You must have a senior member of your comms team in the room as part of the team working on a merger. They cannot do their jobs if they do not know what is going on and they cannot advise you if they are not party to your discussions.
Manage leaks. You can’t completely stop them but you can prepare for them. Plenty of early stage merger talks have been torpedoed by the news getting out before clear messaging explaining the rationale is ready. The reality is that even if your own firm is not leaky you simply cannot be sure of the firm you are in discussion with. Leak planning has to be an early agenda item for leadership of both sides in their talks.
As mentioned, a law firm merger is a marriage of culture, values and business aspirations, with opportunities to expand into new markets or strengthen business lines and coverage. It’s never just about the financials. Therefore you need to carefully consider how to communicate a merger to key stakeholders because they need to buy into the merger dream, and they need to be convinced that it is the right path to take. From employees through to clients, you need to get the tone and message right.
Sometimes what is presented as a merger is clearly an acquisition. This might be a large firm taking over a smaller firm to gain heft in particular practice areas or a presence in a new market. In any respect while these are smaller deals they come with particular challenges. With acquisitions it is often the case that the smaller firm wants it presented as a merger. It is important to be sensitive to that. For big firms the term “local merger” is a longstanding favourite. You may also find an overexcited partner spills the beans to local press before you are ready, which might not affect the deal itself but can certainly put you on the back foot in communicating a positive development.
As with most things in life, preparation is key. Any merger process will go through many stages, with opportunities to update various stakeholders at each point in time. Instead of addressing each stage as they come, you should begin the process with a carefully crafted communications strategy that addresses both your internal and external stakeholders. This plan should be bolstered by aligned key messages, media Q&As, and scenarios and statements to address leaks and difficult questions.
Get your house(s) in order. If both firms have PR teams then you need to make sure they’re aligned on the approach to take. It never looks good when different things are being said, and key spokespeople are speaking at cross-purposes. This could also be a bad omen for the newly combined entity. So start as you mean to go on.
This may sound like an elaborate choreography, but wouldn’t you be worried if you came at something so important less prepared?
The key takeaway is resoundingly clear. Without clear and confident communications, a merger might not be the success story it could be.