Merger Options

Our client, a mid-sized Southeastern firm with several exceptionally strong practice areas, was approached by a national firm seeking to enter their region. During the merger discussions, a second national firm approached our client with an alternative proposal. We assisted the firm in considering their options and eventually recommended that our client remain independent for the immediate future.

Operational Improvement

Operational Improvement engagement for a leading Practice Group of an European firm, the group consisting of 30 lawyers. This group had been experiencing increased international competition affecting the attraction and retention of both clients and talent, and performance had slipped as a consequence. During a six month retainer, we reviewed the group’s strategy, undertook a significant face-to-face client/referrer feedback process (some twenty clients and referrers), facilitated the groups business plans, helped tighten up time-recording, reviewed working practices and knowledge management and coached the group’s partners in leadership skills.

Business Development Program

A large international firm was concerned that partners in various locations were operating as “free agents” in their marketing efforts.  To develop a common business development experience base, the firm engaged Edge International to facilitate an ongoing series of training programs in every office of the firm.  The program was designed to use exercises that stimulated cross-office business development efforts, and resulted in an increase in multi-office engagements and a much greater comfort level among partners in joint marketing activities.

Market Orientation

A firm in a “rust belt” city had been unsuccessful in identifying a merger partner.  As an alternative, they wanted to position themselves as “the” go-to law firm in their city.  Edge International performed a sophisticated study of the marketplace that involved interviewing a large number of businesses.  We determined the areas where growth was most likely to occur in the city, and the firm positioned itself to build both expertise and reputation in those areas. The firm has risen to the point where they are the most profitable firm in the city.

Industry Specialization to Add Value to Clients

A large general practice firm had two clients actively involved in a highly specialized chemical process.  The firm felt its operating and technical experience about the products manufactured and the product liability and environmental issues involved would be valuable to other manufacturers.  We assisted the firm in creating its first industry group, creating internal information flows for industry-related information, gaining a position on the board of the leading trade association serving the industry, and using technical writers to assist in generating a column on legal/business issues for each issue of the industry’s trade magazine.  The result was that the firm began representation of two additional companies and handled a client’s acquisition of several companies that would normally have gone to specialized M&A counsel.

Countless Assignments Providing Leadership Development

We have undertaken countless assignments providing leadership development, high level executive coaching and ongoing support and mentoring for both new as well as highly experienced leaders in various roles within law firms. Many of our partners have practical experience of running large successful legal organisations. Coupled with hands-on practical experience over many decades we can bring ongoing strategic and practical advice to leaders as and when they arise during the course of such assignments.

Identifying and Developing Leadership Potential

A well-established, long-standing firm believed it had “run out of leaders” and it was about to look outside the firm. We were called in to review their circumstances and came to the view that there were a number of potential leaders within their ranks as well as much unrealised leadership potential. The assignment required some restructuring, a new attitude to leadership development and acceptance by partners of new responsibilities and accountabilities. Over time they were able to develop their own leadership and succession into the future.

Restructuring Leadership

A blue-chip international firm had started to face declining revenues and the loss of clients. We assisted the firm in restructuring its leadership structures, emphasizing the pivotal leadership roles of partners and their lawyer–teams, as well as practice and industry sector group leadership and coupled this with an extensive leadership development program for partners and potential partners. In conjunction with this we brought a focus to bear on the development of support service management leadership, something which does not get enough attention in many firms. This was linked to a new approach to partner performance management with an emphasis on developmental feedback and support.

Partner Performance

A high-performing, extremely profitable firm started to feel competitive pressure. They were convinced that it was necessary to implement some form of partner performance management system. They had made three attempts in recent years to introduce such systems but little progress had been made. We were asked to assist and recognised the importance of aligning such a system to the firm’s culture and to use language which made sense to the partners of this firm. Partners were extensively consulted as to the criteria they felt would further drive the firm’s success. We were able to engage partners and build their confidence in the process and objectives and also to persuade them to introduce new criteria to encourage new, positive partner behaviours.

Merger Negotiation

A real estate boutique in a Southwestern city was being courted by a large local firm to join their real estate department. We assisted the boutique in negotiating their merger while creating a retirement buyout as part of the transaction for the firm’s two founding partners. Subsequently, we were hired by the acquiring firm to advise them in two similar mergers with smaller firms.

Implementing Conditions for Regional Merger

Two similarly sized firms in separate large cities on either end of a state were discussing consolidation to compete more effectively with large out-of-state firms that were entering their market. Each firm had a small office in each other’s city. We assisted the firms in working out the details of merging their partner compensation systems, consolidating their offices in each city, working out the details of combining a partnership with a professional corporation that operated on different fiscal years, and dealing with underproductive partners who were not invited to join the combined firm. The merger took effect within less than 100 days after discussions commenced and continues to operate successfully.

Brazilian Firm

Machado Meyer is a top three firm in Brazil, as measured by a combination of size, client prestige, external rankings and market opinion.  They have over 700 lawyers, including 128 partners. 

One of our Principals worked with Machado Meyer on compensation and strategy matters.  Where two previous U.S. consultants had failed to resolve their compensation issues, David was able to help them construct a system that balances seniority, firm investment, teamwork and individual financial performance.  His report received near-unanimous support from the partnership.  He was then retained to work on strategy in 2015. 

International Merger

A large British firm with offices throughout Europe and the Middle East was seeking to establish a presence in the U.S. They were interested in firms with strong transactional practices that did not involve large litigation components, together with a series of industry and geographic preferences. We created a detailed template of the firm’s needs and designed a rating system to consider over 600 U.S. firms. Working with our client, we funneled the number of candidate firms to six and performed “deep” dive” background investigations before making contact and establishing conversations with two firms. The result was one of the largest and most successful international Swiss Verein mergers in history.

Managing Partner Succession

The managing partner of a large law firm with 25 offices was stepping down after many years. The firm did not have a succession plan and feared factions would be created over whether the new managing partner came out of the traditional “home office” or from one of the regional offices.  We worked with the nominating committee and performed independent interviews of partners throughout the firm in determining that the location of the new managing partner was more an issue for the firm leadership than the partners at large.

Linking Partner Compensation to Performance

A firm with a highly subjective modified lockstep system was experiencing a performance drop among many of its middle-aged lawyers.  We worked with the firm to change its compensation system to provide bonus compensation for partners who exceeded the expectations for their seniority step – funded through a compensation hold-back for partners who performed under the expectation for their step.

Large Firm Attrition

Despite having competitive salaries and good working conditions, a large firm continually experienced heavy attrition among its mid-level associates.  Even though they conducted exit interviews, the firm was unable to determine the reason for the heavy rate of departures.  We worked with practice leaders to understand that a large level of non-equity partners and of counsel were siphoning off all of the most challenging work from the mid-level and senior associates.  As a result, their only way to acquire the skills and experience they would need to become partners was to change firms.

Moving to a More Corporate Structure

Governance and Organisational restructuring engagement for a 46 partner (600 people) professional firm in North America. This group had more than doubled its partnership numbers in the last ten years and – recognising that the group should move towards a corporate structure – had constituted a management committee and hired an external chief executive. In practice, however, the partners still were clinging on to the ideal of consensus management and insisted on every decision being approved by the whole partnership. We recommended a number of incremental plans to strengthen the management committee, to streamline the decision-making processes and to assist with better consultation and communication. We also drafted roles and responsibilities at various levels, including a partners’ code to help gain better accountability and buy-in.

Strategic Review and Implementation

Strategy Review carried out for a prominent Asian commercial law firm of 200 lawyers. We were able to help the firm to define its strategic intent to become the dominant independent commercial firm and then worked with them to create a strategic plan that encompassed five strategic projects each with implementation plans and measurable criteria. This work was followed up some time later by individual business planning sessions with every partner to enable them to produce coherent and action-oriented practice group business plans.

Merger Compatibility

Two large firms were involved in protracted merger discussions.  Both firms were eager to achieve the results of the merger but neither felt completely comfortable with the other.  Using the cultural inventory, we were able to demonstrate that, because their cultures were sufficiently different, many of the hoped for synergies from the merger were probably unachievable.

Competitive Strategy For Small Firm

A small general practice firm was finding it increasingly difficult to maintain its client base and compete with the large firms that dominated the marketplace.  Working with the firm, we helped them reverse their existing strategy of adding new practice areas to enhance their full-service image, and focus on a few highly profitable practices where they enjoyed a unique market position.  The result is increased profitability and a more stable practice without the necessity of changing their culture to accommodate an increased number of lawyers.

Building Competitive Advantage

A large firm held a dominant position in several practice areas that were becoming increasingly commoditized through price competition from smaller firms.  We assisted the firm in developing a strategy that selected the practices where the firm had the greatest strengths, and building a competitive advantage through technology and specific capabilities.  The result was they were able to maintain both their dominant position and current pricing by providing client benefits that smaller firms could not cost-effectively provide.

Legal Innovators

Our client, Legal Innovators (LI) is a startup that recruits and trains a highly qualified and diverse “class” of new associates, mostly Ivy law graduates who were close to the hiring standards of big law firms.  Legal Innovators takes on the salary and expense of developing these associates in the early months, then places them in law firms and corporate counsel offices.  After a two-year period and a significant track record, the associates will be in the associate placement market. See https://www.legal-innovators.com

Our Principal, David Cruickshank, developed the training and evaluation program for Legal Innovators, working with co-founders Jon Greenblatt and Bryan Parker.  David also leads regular skills programs and advises on professional development and placement strategies.  The associates at Legal Innovators follow a competencies map and are evaluated on those competencies.  They pursue both in-house training courses and recommended external courses that are paid for by LI.  Associates are also tested on a number of knowledge and skill areas, such as Accounting for Lawyers.  They write monthly self-evaluations, receive mentoring and they will have year-end evaluation reports that can be made available to client firms.

In short, LI associates will come to the hiring market with a junior professional development profile the equal of the most sophisticated large firms.  This development strategy addresses the main complaint of clients – that they have to pay for highly-paid juniors to learn at large law firms.  Similarly, corporate law departments rarely hire at the entry level because of the cost of training; now they have an alternative placement and hiring source.

What does this case study mean for law firms that recruit from law schools?  It demonstrates that the clients want “practice-ready” associates as soon as possible.  Law firms with strong competency frameworks, tailored training courses, a diverse associate class, mentoring and regular evaluation will meet that market need sooner and their investment will pay off in client confidence.  Edge can review your existing associate development program and bring it up to the high standards expected by your clients in today’s market.