Consulting with Buyers and Sellers of Law Firm Practices
Law firm mergers and acquisitions are more common than ever, and are commanding a lot of media attention. Some of the mergers that have captured the most headlines have been the result of failing firms being gobbled up by competitors. The desire to expand into a new practice area or to serve clients in a new geographic area is also behind this trend.
What is far less appreciated is that most discussions about potential mergers and acquisitions fall through. In our experience consulting with law firms who are on both sides of the transaction, most acquisition offers are flawed. This is especially the case when a large firm approaches boutique that is thriving. Unlike investment bankers, we don’t have a vested interest to consummate a deal. Our job is to provide our client the information they need to make a reasoned decision about the merits and drawbacks of a potential merger or acquisition.
Our M&A Related Services for Law Firms
Our primary function is to advise clients about the feasibility and desirability of a potential merger acquisition and help them close the deal if that is what they choose to do. Specifically, we help our clients navigate every aspect of a merger or acquisition including advising on the following issues:
- Due diligence and what information to request of the other side.
- Purchase price and financing terms.
- Whether the seller will remain with the firm, and if so in what capacity?
- Terms of the transaction, including assuming contracts as the lease and other service contracts.
- Compensation arrangements for lawyers and staff, including insurance and employee benefits.
- The terms of the disclosure the seller needs to provide to existing clients and other requirements imposed by Rule 2-300.
Who We Have Served:
We have worked with a wide array of law firms who have considered a merger or acquisition, including the following:
- Advising the managing partner of a business litigation boutique who was approached about merging a branch office of an AmLaw 200 firm.
- Advising 40-something managing partner of a family law firm who was approached by a soon-to-be-retiring lawyer about acquiring his firm. The deal fell through after potential seller refused to provide any of the information we advised the potential buyer to obtain.
- Advising an estate planning firm who acquired a similar firm in a different geographic area; the entire transaction beginning with initial exploratory discussions through closing took place in less than a month.
Don’t Leave It to Chance
The decision whether to pursue a merger or an acquisition is one of the most important any law firm needs to make. Moreover, through no fault of their own, most lawyers have very little experience evaluating, negotiating, or implementing such a transaction. This is too important a transaction to leave to chance.