Mergers are here to stay.
If you believe that (I do), then it’s worth a moment to
explore how to do them right, and what can be learned from this who have
gone before—most famously, perhaps, the 2000 tie-up of Clifford-Chance
and Rogers & Wells.
First off, why are "mergers here to stay?" Essentially,
because law firms want to more or less match the geographic footprint
of their clients: And as the F500 and FTSE100 are increasingly
global, so must be the top-tier firms that serve them. That, in
any event, is the take-away from this Financial
Times piece. How could any firm—even one of the statute
of Latham
& Watkins—lure a partner from Wachtell? Because Latham’s
global reach was "eye-opening;" not to mention that your
own far-flung partners are invariably more responsive than outsourcers.
Michael Bray, present at
the creation of Clifford Chance/Rogers & Wells/Puender, talks about the
extraordinary change in the time between the Coward Chance/Clifford Turner
merger in 1987 and the 3-ring-circus in 2000. For starters, the
CC/CT merger was conducted in absolute secrecy, complete with a dedicated
"safe house," and no leaks to the legal trade press (which, one senses
Bray feels, grew in aggression over the time span).
What’s the hardest part of a merger? To the surprise
of no one, it’s integrating cultures. What’s interesting about
the British/American/German challenge Clifford Chance faced in 2000 is
that the Americans were, ultimately, viewed as the cultural outlier,
with the Brits and Germans closer to each other in tonality and approach
than either were to the Americans. What does it take, on
the ground, to work through the cultural integration?
"You have to drive through some of those things fairly early
on because you have a window of opportunity."There is the euphoria of getting the merger done, and there is the market
thrust that comes from it.
But then you actually have to make it work, so people have got to work
together and you have to drive some changes through."If you do it too fast, then you suffer; but if you do not do it fast
enough, then you lose the opportunity."Of course, that involves issues which affect the way people run their
daily lives, and most people will tell you that change
is great, we should
have as much of it as we can, but don’t touch
me."…
There are some people who will go and who will not
make the grade in a merger." [emphasis
supplied]
In other words, not too fast but not too slow, not too brutal but not too
accommodating, and not too radical but not too timid.
A tall order.
What, then, would Bray do differently? One word: Communication—"it
is a very, very difficult issue." They didn’t spend enough
time on it before, during, or (initially) after.
I have now heard
this from veterans of essentially every firm that’s been through a
merger.
Astute, alert, analytic, absorbent as lawyers are, we don’t seem to
getting this.
Mergers are here to stay: Communicate.
