What Questions Should I Ask Before Entering a Law Firm Partnership?
Law firm mergers and partnerships seem to be increasing across many different practice areas, but not all mergers are successful. Before you enter into a partnership with another firm, there are a few questions you should ask them—and yourself.
Goals
First, it’s important to make sure your goals align. If you and another firm or solo are talking about joining practices, your practice areas presumably have some overlap.
Does the other firm handle a niche area that your firm would benefit from expanding into? Or how else do the two firms complement each other or where cross-selling would make sense? Likewise, consider factors such as geography and how those will play into your goals.[1]
Ultimately, even if your firm is the smaller of the two, the partnership should offer both firms a way to step closer to their goals.
Finances
Look at the other firm’s books—and your own. Both firms should be on solid financial footing.
Don’t enter into a partnership as a way to “save” either firm. A merger won’t make financial problems disappear. Instead, it will likely only complicate them.
And don’t think just about current finances. Talk through what the financial and ownership side of things will look like once the firms are merged. There are a number of ways to decide what that looks like, but it should be a resolution that both sides feel is fair.
Culture
Along with goals and finances, it’s also vitally important that you consider the other solo or firm’s culture and how it will mesh with your own.[2]
This doesn’t mean the two firms’ cultures need to be exactly the same. But they will eventually become one culture, so it’s worth looking at how decisions are made, what each firm’s values are, how problems are brought to management attention, and how they’re dealt with.
Chemistry
Even firms with similar cultures don’t always click. And yet, a lot is riding on that “click.”
In order to avoid tension down the line, it’s important to get a sense early on if you feel that the two firms have chemistry. In some respects, this can be the least obvious consideration because it’s the hardest to measure via external factors, yet it’s immensely important.
We almost never say this, but when it comes to chemistry, listen to your gut.
Questions
When considering entering into a law firm partnership, it’s important to ask questions—and often it’s important to ask questions from a few different angles on the same topic.
Take time to make sure a partnership fits both firms’ goals, culture, and chemistry—and that firm finances are in good shape.
References
1. Should You Merge with Another Law Firm
2. Why So Many Law Firm Merger Attempts Fail