Law firm mergers are always sold to the partners of the participating firms on the basis of the new revenues that will be created through client synergies.  Unfortunately, most firms spend so much time planning the marketing of the merged firm to potential clients that they put at risk their existing client bases.

When advising on a merger, we are often asked to interview a sampling of clients of both firms to understand their reaction to the proposed consolidation.  There are a wide variety of reactions but the three common concerns we hear from clients are:

1.  “Are billing rates going to increase?”  This is almost universally the first question clients ask, especially when the merger is a smaller firm merging with a larger one.  This is not a paranoid delusion; one of the areas of opportunity that law firms look for in a merger is the ability to correct what they consider to be below market rates.  Lots of clients have experienced this first hand, not just with law firms but in all sorts of corporate mergers.

2.  “Will I keep the same attorneys?”  While we never see a firm do much shuffling of lawyers’ client assignments after a merger, it continues to be a client concern.  Interestingly, this is not always a fear.  Some clients confide that they hope the merger will give them an opportunity to change the team serving them.

3.  “Will my work be done somewhere else?”  We usually hear this when a local firm is merging with a large regional or national firm.  This is, in part, a reaction to the expanded capabilities that local firms talk about as justification for the merger.  Clients logically assume that if they are going to enjoy enhanced capability through the merger, their work must be going to where that capability is located.
Added to these concerns is the ever-present risk of lawyers, unhappy with some aspect of the merger, moving to another firm and taking their clients with them.

Fortunately, there are actions that law firms can take to mitigate some of these risks.

•    Orchestrate a mass email campaign from each lawyer to the clients for whom they are responsible, announcing the merger a day prior to the official announcement.  Everyone wants to be treated as an insider and part of that is getting news in advance.  The public relations gurus will argue that this softens the market impact of the merger announcement, but that’s a small trade-off for keeping your clients in the loop.

•    Develop a clear party line on rate increases.  If a new rate structure is part of the plan, try and develop a compensating package of benefits for each client.  Maintaining the partner’s rate at its current level or converting to a blended rate are possibilities.  This could also be a good opportunity to introduce some form of alternative fee.

•    Clients often have more interaction with associates, assistants and paralegals than with partners.  So if there is fear or uncertainty among the staff, the clients will sense it.  Make sure that the staff knows they have a secure position, knows the party line and feel like insiders on the reasons for the merger.  You want clients to feel confident in the future of their law firm which means everyone they are in contact with at the firm must be knowledgeable and enthusiastic.

•    Make a promise to clients that their work will never be performed by any lawyer who they have not been “introduced to.”  Then, make it a point to send an email to clients with a bio on lawyers who have not previously worked on their matters.  Clients hate seeing names on bills they have never heard of before and this is an easy way to keep that from happening.  Plus, any time you have occasion to make contact with your clients, it is a good thing.

All of the above falls under the heading of common sense.  But in the heat of a merger, basics are often forgotten in the pursuit of new opportunities.