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GAZETTE
JULY-AUGUST
1979
Merger of Medium Sized Practices
V. J. D. Kirwan, Solicitor
(Text of Lecture to Dublin Solicitors' Bar Association Seminar on "The Realities of Practice", 9th
March 1979)
I start, I think, with some advantage in that it is un-
likely that my listeners will themselves have experience of
more than one merger and some may indeed have
escaped the trauma. I have been involved in one merger
only, but it was unusual and possibly ambitious, involving
a merger of three medium sized firms.
WHY MERGE FIRMS?
It is fundamental that there should be a sound reason
for any merger that is contemplated. Any Solicitor who
harbours the notion that he will, by merging, end up in a
cosy position free from work and responsibility, is sadly
mistaken. Nothing could be further from the truth. The
work involved in organising a successful merger is
immense, and unless it is carried out thoroughly the
resulting shambles is likely to produce heart attacks in the
participants and an unsatisfactory service to clients.
WHY THEN MERGE?
A merger will usually take place for one or more of
three reasons.
(1) PERSONNEL.
(2) BUSINESS.
(3) TO PROVIDE A BETTER AND MORE
SPECIALISED SERVICE TO CLIENTS.
(1) PERSONNEL
There are cases where one firm may have a surplus of
partners or staff and not enough work and another firm
may have too much business to handle and not be able to
recruit sufficient staff. In such a case a merger may be
beneficial to both.
Similarly an elderly Practitioner with a good business
who wants to take matters a little easier may want to join
forces with a younger solicitor who is starting practice,
the younger Solicitor providing the energy and con-
solidating the firm for the future and the elder practitioner
providing the established business.
Sharing responsibility
Under the heading PERSONNEL there is I think
another reason for merger and that is the possibility of
responsibility. In a small or medium sized firm a
Practitioner may find himself overburdened with work
and in difficulties in going away on holidays and in
general constantly under pressure. A merger may enable
responsibility to be shared and create a situation that
back up staff can be trained and financial and administra-
tive staff can be afforded to enable the Solicitor to have
the financial and administrative sides of the practice run
efficiently leaving him free to concentrate on his own
work for clients.
Colleagues who have tried to recruit competent staff,
qualified or unqualified, will know how difficult this is;
apart from very exceptional cases good staff are firmly
secured by good positions in other firms. It is well known
that in times of intense competition for good young
Solicitors, firms must promote them and put them on the
notepaper at an early stage if they are to hold them These
people will mostly have been apprenticed and trained and
then retained in that same office.
So, to recruit good staff it will probably be necessary to
train them yourself and to retain them. Tfiis is often easier
to do in a larger practice than a small one.
In a larger practice it is possible to have several
apprentices at one time and to retain only the best.
(2) BUSINESS
Another reason for merging firms may be to extend tne
categories of business carried out by the firm and hope-
fully get into more profitable areas. It is well known that
the larger commercial firms and institutions rarely give
their business to small or medium sized practices. A
larger firm will tend to attract a better type of commercial
business.
This does not always mean profitability as with lower
overheads and other advantages, not possible in a larger
firm, the small practitioner will often take home far more
than the Partner in a medium or large practice.
(3) BETTER SERVICE TO CLIENTS
The previous two categories of reasons for merging
might be considered as promoting only self interest. A
further motive for merging will be to provide a more
specialised and professional service to their clients. In a
larger firm it should be possible to specialise and to
departmentalise and this should lead to a better service to
clients. I will come back to this later.
WHO DO YOU MERGE WITH
Having decided that you see advantages in a merger
for one of the reasons indicated above, who then do you
merge with?
Clearly the other firm must complement yours either
from a business point of view or from a staff point of
view. There may be an advantage in merging with a firm
with a different profile to yours.
It should be possible to be less emotional about
choosing new partners than choosing a marriage partner!
Nevertheless it is fundamental that you should like and
get on well with your prospective partners. You should
try to make sure you know them reasonably well not only
in business but also socially, before you agree to merge. It
is also, I think, important that your prospective partners
should not be small minded people. There are so
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