For mergers to be successful, there really has to be a strategic reason on both sides that is well thought out by both parties, regardless of who makes the approach to whom, explains Gary Miles, President and CEO of Miles Partner Placement, an elite partner placement group movement and merger boutique. Today, Gary speaks with host Chris Batz about recent law firm merger activity, future trends for corporate law firms, and the ABA rule 5.2.
Gary explains that in his opinion a successful merger is one which has a high level of retention over the time the partnership was brought on along with increased metrics from the combined entity over time. In order to achieve this success, there needs to be a very strategic reason for the merger on both sides that is fully thought out prior to even letting the public know. Recently mergers have been being made more public, hitting the media well before details are truly ironed out. This is surprising as in the past firms were much more careful about stopping the leak of information. As for the future, Gary believes that with the client market heading more toward globalization, that smaller entities will need to consider merging or allowing themselves to be acquired in order to achieve rapid growth. Consolidation happens in businesses every day and the same is beginning to be seen with law firms.
Law firm mergers tend to get a lot of attention and it can be useful to have the details completely ironed out before word hits the press. When judging whether a merger is successful or not, it is important to look at least 5 years down the road to really understand where the metrics sit for the combined entity. With a market push toward globalization, law firm mergers are likely to be more and more common in the coming years.
“For mergers to be successful, there really has to be a strategic reason on both sides that is well thought out by both parties, regardless of who makes the approach to whom.” (7:33 | Gary)
“I term a successful merger, from my perspective, I’m not using some sort of, you know, defined industry standard, but a high level of retention over time of the firm partnership that was brought on. Increased metrics from the combined entity over time.” (11:59 | Gary)
“There’s consolidation happening every day, law firms depend upon it in terms of revenue.” (19:15 | Gary)
“A lot of times what gets in the way most often of deals is either the outright adversity or the quote, unquote major client business conflict that often exists.” (37:20 | Gary)
“In our country’s history, money usually wins out. Capital will find a way to win out.” (38:51 | Gary)