Why Law Firm Mergers Are a Growing Reality For More Firms
Merger discussions among even some unlikely pairings seem to be heating up. In their new book, Kent Zimmermann and John E. Morris explain why and offer tips on how firms of various sizes and market positions should approach merger discussions.
June 02, 2022 at 03:27 PM
6 minute read
Law Firm MergersEditor's Note: In their new book "Law Firm Mergers: Lessons From Successful Strategic Combinations," Kent Zimmermann and John E. Morris outline reasons for and paths to law firm mergers. In this first of three excerpts from the book, the authors explain why firms are increasingly considering a merger. This excerpt was edited for length.
The need for growth is one factor driving mergers. Most firms want and expect to become a better version of themselves. Their partners aspire to maintain or improve profitability, quality and culture, and to grow. As clients increasingly value specialization and turn to firms that are known for excellence in given practices, sectors and geographies, firms must show 'bench strength' and quality as deep or deeper than peers if they expect to draw the most sophisticated, lucrative assignments. In addition, in a conventional pyramid firm structure, where partners are leveraged with associates and profit from associates' billings, growth is essential to maintain or enhance profit margins and to create continuing opportunities for ascending young lawyers—that is, to make room for new partners without reducing leverage.
Scale also provides an advantage when it comes to pitching for business. Larger firms with higher-quality practices and sector teams can cite longer relevant deal lists, more lead deal lawyers who have mastered the industries on which they focus, more trial wins, more winning first-chair litigators and more relevant experience overall.
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