Is Your Firm Considering a Merger?

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To merge or not to merge? That is the question for law firms these days, and that was the topic of a recent panel discussion presented by the Florida Association of Managing Partners (FAMP). Kaufman Rossin hosted the event at our Miami office with co-host Jones Lang Lasalle (JLL).

Last year was a banner year for M&A activity, globally and nationally, across many business sectors. The legal industry in particular saw a record number of mergers, according to data from legal consultants Altman Weil. “We expect the market to remain hot in 2016,” Altman Weil Principal Ward Bower told the New York Times.

Spencer H. Silverglate, FAMP chairman and managing shareholder of Clark Silverglate, P.A., opened the FAMP event, and I moderated the discussion about the benefits, potential drawbacks and business case for mergers, with a focus on professional services companies and law firms.

The conversation couldn’t have been more timely. The event took place during the same week that Miami-based Greenberg Traurig, an AM Law 100 firm, announced it is in merger talks with British firm Berwin Leighton Paisner.

Panelists Alan Kleber and Michael Boland of JLL as well as Blain Heckaman and Scott Soucy of Kaufman Rossin spoke from their professional expertise as well as from personal experience. Both JLL and Kaufman Rossin recently announced M&A activity.

In December, commercial real estate, financial and professional services firm JLL acquired Cresa South Florida, a tenant-focused real estate firm. Also in December, Kaufman Rossin announced an agreement to sell its fund administration affiliate, Kaufman Rossin Fund Services, to ALPS, a subsidiary of publicly traded DST Systems, Inc.

M&A planning

Before even considering M&A activity, firm management should step back and “take the temperature” of the firm. Take the time to reflect on your strategic vision for the firm’s future and consider whether a merger or acquisition will help you get there. Successful mergers and acquisitions require a lot of planning, from industry analysis and target identification to due diligence and business integration. Before you invest time, energy and resources, confirm that you and your partners are on the same page.

Any firm thinking about a merger or acquisition, whether on the buy or sell side, needs to ask tough questions to determine whether an M&A transaction is the right move. Does this move fit within our growth strategy? Does it help us accomplish our strategic objectives? Does it align with our culture and values?

Beyond the big-picture questions, there are specific considerations that firms should address, as target or suitor.

Buy-side considerations

As a suitor, you will want to identify a target that provides long-term value. You may want to strengthen existing practice areas or add new ones that fulfill an unmet client need. Ultimately, the deal should make your firm better positioned to succeed than you were before.

Questions to ask yourself may include:

  • Is there a sustainable competitive advantage?
  • Will we be able to increase our market share?
  • Will we be able to broaden our array of services?
  • What is our financial risk tolerance?
  • Are the target firm’s IT systems compatible with ours?
  • Do we have a transition and integration plan that includes change management for both culture and technology?
  • How does our rate/fee structure compare to the other firm’s?
  • Are there any potential client conflicts?

Sell-side considerations

As a target practice, one of the biggest deliberations involves weighing the loss of autonomy against the financial gains of a merger or acquisition. It’s not easy to give up control over decisions, especially when you built the company. But the benefits may outweigh the loss.

Other considerations may include:

  • Do we need to scale up to stay competitive in this market?
  • Will this deal help us reach upstream or larger clients?
  • Is there synergy between our talent pool and theirs?
  • How will the age of our partner base affect a transaction?
  • How does the suitor’s compensation system compare to ours?
  • Does the suitor have sufficient bandwidth to manage our clients’ needs?
  • How does our rate/fee structure compare to the other firm’s?
  • Are there any potential client conflicts?

Months or even years of planning go into a successful merger or acquisition. Firms considering an M&A move should speak to a business consulting consultant who can assist throughout all stages of the transaction.


Robert Stone, CPA, ABV, CFF, is a Senior Client Services Principal at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.

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