The Gazette 1979

GAZETTE

JULY-AUGUST

1979

DECISION TO MERGE

Having considered the factors to which I have referred,

the decision to merge is made. A number of matters

immediately arise. Probably the best way of dealing with

these matters are for the prospective partners to arrange

sub committees to deal with various aspects and to put a

particular person in charge of each sub committee.

(1) Premises

A merger will usually involve a move by both parties

and this I think is an advantage. It is new for both sides

and removes any sense of one party moving in on the

other party's ground. It is I think better to rent the new

offices than to purchase them. A purchase by one or more

of the new partners can cause problems in the future.

Renting premises also makes for greater efficiency as the

partnership has to bear full commercial overheads. The

location of the new offices will obviously be important. In

a city the main factors that are likely to apply are the

desire to be near to other Solicitors' offices and also if

possible to be near the Courts and the various Govern-

mental and other offices with which Solicitors have to

deal. Car parking is also a factor.

New premises will give an opportunity to plan the new

offices for maximum efficiency with as much horizontal

space as possible. A much better use of space than may

have existed in old premises, should be possible.

The work on the premises is likely to be very sub-

stantial. In order to ascertain the size of the premises that

will be required it is necessary to make a detailed list of

the staff employed by each of the two firms and from this

to make some assessment of the space requirements of the

new firm. Allowance must also be made for expansion as

there is no point in moving into new premises and then

finding that after a few years the premises are too small.

In assessing space requirements, you will probably need

to give consideration to some features which you may not

have had in your existing offices. These may include the

provision of a strong room, the provision of a simple

canteen, the provision of plenty of storage space.

Whether the premises are bought or rented, there will

be a lot of work required in planning the details of the lay-

out and finish of the office and also built in furniture.

Whether you buy or rent, it will also be necessary to agree

the financial arrangements with your other partners. Prior

to the move, careful study must be given to the allocation

of rooms. This is not as simple as it sounds. Firstly, there

is the problem of seniority not only between the partners

but also between the staff. You must be able to allocate

rooms in such a way as will not cause offence. In

allocating rooms also it is desirable to give thought to the

degree that you intend to departmentalise so as to put

persons who will be working in a particular line in rooms

that are close to each other.

One point that may not seem obvious is that there is no

reason why the date for moving into the new premises

must coincide with the date of the merger and 'for the

commencement of the new partnership. Indeed, it seems

to me that there are advantages in moving into the new

premises a couple of months earlier than the merger be-

cause this gives time to settle down and time for the staff

to integrate before the critical date.

(2) Accountants/Consultants

At an early date, the new partners must choose which

accountants will be acting for the new firm. The

accountants will be able to advise on the Taxation

aspects and also on whether or not a Service Company

should be .employed. Apart from the accountancy advice

and work for the new firm, there is another aspect. This is

the employment of outside Consultants to advise and

carry out much of the work in preparing for the merger.

The accountants for the new firm may or may not be the

best persons for this consultancy work. The advantage of

bringing in Consultants in my view is overwhelming. The

existing partners will already have a lot of extra work by

reason of the merger and the very heavy and detailed

thought and work necessary in planning the merger has a

much better chance of being done successfully if

Consultants are employed. This does not mean that the

partners can leave everything to the Consultants. The sort

of details that will need to be worked out are:-

(a)

The filing system:

A new code will need to be

worked out to fit in with the Accountancy system and the

ledger card system chosen. All existing files in the two

offices will be renumbered so that the files in the

existing firms will be part of the one new system

BEFORE the merger takes place. A lot of work will also

be needed in destroying old files and papers so as not to

clog up the new premises unnecessarily.

(b)

Accountancy system:

The accountants will need to

advise on what accountancy machines and systems will

best suit the new firm. Nowadays, consideration must

also be given as to whether to use a computer and if so

whether to buy or rent a computer.

(c)

Office equipment and furnishings:

These will need

careful study. It will be necessary to standardise on the

types of dictating and other machines used in the new

firm. A suitable telephone system for the new firm will

also need to be arranged.

(d)

Stationery/Notepaper:

Notepaper for the new firm

will have to be designed and in addition thought will need

to be given to providing various other types of firms

stationery including all the various forms frequently in use

in solicitors' offices.

(e)

The physical problem of moving:

This will require

careful planning and coordination. The furniture will need

to be labelled and all files will need to be marked so that

when the big day comes the firm carrying out the moving

will know exactly where the furniture is to go and where

the files are to go so that the move can be carried out with

the least possible confusion.

Preparation of Notice to the Press, Notice to clients,

etc.:

A notice to clients will need to be drafted. Each firm

will need to list its clients. It will also need to list the

solicitors and the accountants with whom it deals out-

side Ireland because these also should be circularised. The

Law Society will facilitate merging firms in circularising

solicitors in Ireland.

(3) Integration of Staff

In any merger, there should be some saving by

integration of staff. Each of the two firms will have

Receptionists and their own accounts department. In the

new firm, it may be that only one Receptionist will be

required and that the number to be employed in the new

accounts department may be less than the combined total

of the persons previously employed. A choice may have