Maximizing Law Firm Mergers in the Media

Grappling with an unprecedented recession, law firms are merging out of both necessity and opportunity, according to a recent client advisory from Hildebrandt and Citi Private Bank.

In the first quarter of 2009, Hildebrandt reported 33 completed mergers involving U.S.-based law firms, a figure that rose from 22 in the first quarter of 2008. Though merger activity got off to a strong start, Hildebrandt reported that this number dropped to nine in the second quarter of 2009 as law firms began to feel the full thrust of the recession. Law firm deals, however, could rebound again soon as well-capitalized law firms continue to explore growth opportunities created by the current downturn while other law firms seek out white knights.

The Media

Amid these types of expectations and economic pressures, managing law firm mergers with the media ' now more than ever ' presents a high-stakes and complex set of challenges for law firms looking to maximize these milestones and communicate their newly expanded platforms.

Mergers, historically, create rare platforms for private law firms to define and, in many cases, redefine themselves publicly. When leveraged properly with the media, mergers are one of the only times law firms have access to a captive audience of both business and legal media interested in their respective strategies. Resulting media coverage provides immediate visibility and credibility for the newly merged firm and creates a fresh dialogue with reporters moving forward.

While this presents an opportunity, it also presents a need. Firms engaged in merger discussions need to be prepared to articulate their message and strategy before the marketplace does it for them. In today's short-cycled news environment, this must be done swiftly and strategically, leveraging the numerous communications vehicles available today.

Merger Data

A closer review of Hildebrandt's merger data from the past year reveals that more than half of the firms ' regardless of their size ' failed to capitalize on the full media potential of their combinations. Consequently, a variety of these firms across the country allowed their announcements to be commoditized by the media and their strategies to be defined for them, without their active involvement.

In one instance, two firms based in the West merged together, creating a sizeable firm with more than 400 attorneys and 15 offices, including a significant office on the East Coast. This announcement, however, generated an underwhelming five stories spread throughout only three of the firm's 15 markets. Taking a closer look at media coverage of this merger, three of these five stories appeared as short “news briefs” that did not contain any key messages and none appeared in the firm's key East Coast market.

Effective Communication

Faced with this feast or famine scenario, effective communication remains paramount and law firms can maximize their merger announcements in the media by following three key strategies throughout the M&A process.

1. Manage Leaks and Rumors to Your Advantage

To truly unlock the marketing communications value of a law firm merger, proper precautions must first be taken to protect the integrity of the merger in the media prior to its official announcement. This, however, is easier said than done. Merger negotiations have a long history of leaking into the press, and law firm mergers are no different, which is further amplified by the emergence of social media and blogs, as well as the immediacy of today's news.

Throughout the course of merger negotiations, leaks spring from a variety of sources ' legal recruiters, disgruntled attorneys, executive assistants, vendors, etc. ' and, if significant, can precipitate a wave of media coverage in which the firm has no active participation.

Of course, every situation is different. For a widely publicized merger completed between two Midwestern firms in mid-2008, rumor coverage was anticipated and welcomed by the larger firm because it wanted to send a signal to the marketplace that the other firm “was no longer in play” as the smaller firm was viewed in the market as a very attractive merger candidate. In other instances, firms have effectively responded to media leaks by communicating that “we have nothing to report at this time” and “you [reporter/outlet] will be among the first to know if and when we do.”

The good news is that from a publicity point of view, the full story has not been told until both firms have had a chance to tell their side of the story. So media coverage preceding an official announcement by the combined entity can be a good thing because it builds anticipation in the marketplace and can extend the life of the story by several weeks without diminishing the news value of the main event when the announcement becomes official. Depending on the communications objectives, challenges and priorities for the merger, firms can utilize leaks to their advantage.

Again, it is a slippery slope ,which is why leaks and rumors need to be actively managed. This begins with daily (sometimes hourly) media monitoring designed to track any related “breaking” news that appears in print or online, and may later require the establishment of a media “war room” if media speculation accelerates alongside merger preparations.

Once merger discussions, formal or otherwise, have begun, senior management should notify and assemble a trusted communications team tasked with outlining an initial communications strategy for the deal, led by the development of effective holding statements and related leak strategies. If firms are contacted by a reporter or employee, these tools provide the opportunity to carefully and subtly frame a merger for external and internal audiences.

Faced with challenging economic conditions for the first time in years, merger rumors are swirling around several law firms and these tactics are as important as ever. A post by the popular blog Above the Law best summarizes the phenomenon of law firm merger speculation: “There has also been a steady increase in rumors about law firm mergers. Some of them will turn out to be true, some not. The fact that some gossip won't pan out doesn't make it any less interesting.”

Determining what your firm's statement will be in the face of merger rumors is critical. However, even more important is deciding when a response is warranted and when rumors are better left unaddressed.

2. Leverage Mergers As Strategic Platforms, Not Transactions

Press releases announcing law firm mergers are routinely stuffed with superlatives and laundry lists of practice groups, and then sprinkled with a variety of financial data ' all to articulate the value of the deal for the firm itself.

To illustrate, here is a sampling from several recent merger press releases: “largest and most highly regarded”, “exceptional lawyers,” “lawyers are outstanding,” “depth and breath has expanded,” “established reputations for excellence,” “superior practices,” “seamless representation,” “record revenue” and “14% increase over the previous year.”

Big mistake. Merger communications are often too inwardly focused, highlighting the value of the deal to the firms themselves rather than the benefits to their sophisticated and rapidly evolving client base. Mergers presented in this transactional fashion can handcuff the ability of firms to appeal broadly to the media.

Today, the financials of a newly combined firm are a particularly important element of law firm mergers and firms need to carefully consider what types of financial metrics (i.e., revenue, profits per partner, etc.) they are willing to publicize in order to illustrate their new strategic position in the marketplace. Depending on the size and strategies of the firms involved in a combination, highlighting key financials in the media may not be a priority, but firms should still be prepared to answer these types of questions from reporters.

Just as important, the rationale behind law firm mergers has been commoditized in the media over the past decade. Complimentary practice groups, access to key global or national markets, expanded platforms, etc., are no longer compelling storylines in their own right. Mergers today are best leveraged as part of a strategic platform that tells the growth story of the firm through the changing demands and needs of its client base. Shifting the focus from the firm to its clients immediately makes the merger more relevant to an expanded universe of business reporters who may or may not be familiar with the legal industry. This can be accomplished anecdotally or through the use of specific client testimonials.

Highlighting specific client-service benefits also allows the firm to rollout its merger announcement to targeted industry trade publications read by clients and prospective clients. Making this transition from law firm story to business story is paramount to generating significant traction for a merger in the media.

3. Maintain Post-Merger Media Visibility

This approach is simple: Following the announcement, give reporters more to write about to extend the shelf life and momentum of the merger, while further credentialing the firm and its attorneys. Mergers create a fresh dialogue with media so consistent and effective follow-up with these contacts is critical to the long-term success of the recently merged firm and necessary for building its reputation.

Positioned again through a client-service lens, immediate follow-up items might include a growth forecast for specific markets and industries or a new client success story that illustrates tangible benefits of the firm's new platform.

Meanwhile, a focused and proactive thought leadership program designed to position attorneys as subject matter experts also plays a key role in maintaining and raising the visibility of the firm and its priority practices in the media.

Mergers should be catalysts for law firms to establish a more robust presence in the media. But faced with the task of successfully integrating new groups of attorneys, many firms prematurely scale back public relations initiatives, thus quickly reducing their recently established foothold in the media.

A Rare Opportunity

With the law firm industry experiencing its most significant contraction since the 1990-91 recession, law firm merger activity is again on the rise and these mergers will be some of the most closely scrutinized combinations of the past decade.

Much more than a transaction, law firms need to carefully harness the rare positioning opportunities provided by mergers in order to develop a sustained media presence through which to engage clients, prospects and other key stakeholders.

John Corey is a founding partner of Greentarget, and president of its North American operations. He can be reached at [email protected]. Brian Kiefer is a vice president with the firm, and can be reached at [email protected]. They have handled communications for many of the legal industry's highest-profile law firm mergers during the past decade.

Grappling with an unprecedented recession, law firms are merging out of both necessity and opportunity, according to a recent client advisory from Hildebrandt and Citi Private Bank.

In the first quarter of 2009, Hildebrandt reported 33 completed mergers involving U.S.-based law firms, a figure that rose from 22 in the first quarter of 2008. Though merger activity got off to a strong start, Hildebrandt reported that this number dropped to nine in the second quarter of 2009 as law firms began to feel the full thrust of the recession. Law firm deals, however, could rebound again soon as well-capitalized law firms continue to explore growth opportunities created by the current downturn while other law firms seek out white knights.

The Media

Amid these types of expectations and economic pressures, managing law firm mergers with the media ' now more than ever ' presents a high-stakes and complex set of challenges for law firms looking to maximize these milestones and communicate their newly expanded platforms.

Mergers, historically, create rare platforms for private law firms to define and, in many cases, redefine themselves publicly. When leveraged properly with the media, mergers are one of the only times law firms have access to a captive audience of both business and legal media interested in their respective strategies. Resulting media coverage provides immediate visibility and credibility for the newly merged firm and creates a fresh dialogue with reporters moving forward.

While this presents an opportunity, it also presents a need. Firms engaged in merger discussions need to be prepared to articulate their message and strategy before the marketplace does it for them. In today's short-cycled news environment, this must be done swiftly and strategically, leveraging the numerous communications vehicles available today.

Merger Data

A closer review of Hildebrandt's merger data from the past year reveals that more than half of the firms ' regardless of their size ' failed to capitalize on the full media potential of their combinations. Consequently, a variety of these firms across the country allowed their announcements to be commoditized by the media and their strategies to be defined for them, without their active involvement.

In one instance, two firms based in the West merged together, creating a sizeable firm with more than 400 attorneys and 15 offices, including a significant office on the East Coast. This announcement, however, generated an underwhelming five stories spread throughout only three of the firm's 15 markets. Taking a closer look at media coverage of this merger, three of these five stories appeared as short “news briefs” that did not contain any key messages and none appeared in the firm's key East Coast market.

Effective Communication

Faced with this feast or famine scenario, effective communication remains paramount and law firms can maximize their merger announcements in the media by following three key strategies throughout the M&A process.

1. Manage Leaks and Rumors to Your Advantage

To truly unlock the marketing communications value of a law firm merger, proper precautions must first be taken to protect the integrity of the merger in the media prior to its official announcement. This, however, is easier said than done. Merger negotiations have a long history of leaking into the press, and law firm mergers are no different, which is further amplified by the emergence of social media and blogs, as well as the immediacy of today's news.

Throughout the course of merger negotiations, leaks spring from a variety of sources ' legal recruiters, disgruntled attorneys, executive assistants, vendors, etc. ' and, if significant, can precipitate a wave of media coverage in which the firm has no active participation.

Of course, every situation is different. For a widely publicized merger completed between two Midwestern firms in mid-2008, rumor coverage was anticipated and welcomed by the larger firm because it wanted to send a signal to the marketplace that the other firm “was no longer in play” as the smaller firm was viewed in the market as a very attractive merger candidate. In other instances, firms have effectively responded to media leaks by communicating that “we have nothing to report at this time” and “you [reporter/outlet] will be among the first to know if and when we do.”

The good news is that from a publicity point of view, the full story has not been told until both firms have had a chance to tell their side of the story. So media coverage preceding an official announcement by the combined entity can be a good thing because it builds anticipation in the marketplace and can extend the life of the story by several weeks without diminishing the news value of the main event when the announcement becomes official. Depending on the communications objectives, challenges and priorities for the merger, firms can utilize leaks to their advantage.

Again, it is a slippery slope ,which is why leaks and rumors need to be actively managed. This begins with daily (sometimes hourly) media monitoring designed to track any related “breaking” news that appears in print or online, and may later require the establishment of a media “war room” if media speculation accelerates alongside merger preparations.

Once merger discussions, formal or otherwise, have begun, senior management should notify and assemble a trusted communications team tasked with outlining an initial communications strategy for the deal, led by the development of effective holding statements and related leak strategies. If firms are contacted by a reporter or employee, these tools provide the opportunity to carefully and subtly frame a merger for external and internal audiences.

Faced with challenging economic conditions for the first time in years, merger rumors are swirling around several law firms and these tactics are as important as ever. A post by the popular blog Above the Law best summarizes the phenomenon of law firm merger speculation: “There has also been a steady increase in rumors about law firm mergers. Some of them will turn out to be true, some not. The fact that some gossip won't pan out doesn't make it any less interesting.”

Determining what your firm's statement will be in the face of merger rumors is critical. However, even more important is deciding when a response is warranted and when rumors are better left unaddressed.

2. Leverage Mergers As Strategic Platforms, Not Transactions

Press releases announcing law firm mergers are routinely stuffed with superlatives and laundry lists of practice groups, and then sprinkled with a variety of financial data ' all to articulate the value of the deal for the firm itself.

To illustrate, here is a sampling from several recent merger press releases: “largest and most highly regarded”, “exceptional lawyers,” “lawyers are outstanding,” “depth and breath has expanded,” “established reputations for excellence,” “superior practices,” “seamless representation,” “record revenue” and “14% increase over the previous year.”

Big mistake. Merger communications are often too inwardly focused, highlighting the value of the deal to the firms themselves rather than the benefits to their sophisticated and rapidly evolving client base. Mergers presented in this transactional fashion can handcuff the ability of firms to appeal broadly to the media.

Today, the financials of a newly combined firm are a particularly important element of law firm mergers and firms need to carefully consider what types of financial metrics (i.e., revenue, profits per partner, etc.) they are willing to publicize in order to illustrate their new strategic position in the marketplace. Depending on the size and strategies of the firms involved in a combination, highlighting key financials in the media may not be a priority, but firms should still be prepared to answer these types of questions from reporters.

Just as important, the rationale behind law firm mergers has been commoditized in the media over the past decade. Complimentary practice groups, access to key global or national markets, expanded platforms, etc., are no longer compelling storylines in their own right. Mergers today are best leveraged as part of a strategic platform that tells the growth story of the firm through the changing demands and needs of its client base. Shifting the focus from the firm to its clients immediately makes the merger more relevant to an expanded universe of business reporters who may or may not be familiar with the legal industry. This can be accomplished anecdotally or through the use of specific client testimonials.

Highlighting specific client-service benefits also allows the firm to rollout its merger announcement to targeted industry trade publications read by clients and prospective clients. Making this transition from law firm story to business story is paramount to generating significant traction for a merger in the media.

3. Maintain Post-Merger Media Visibility

This approach is simple: Following the announcement, give reporters more to write about to extend the shelf life and momentum of the merger, while further credentialing the firm and its attorneys. Mergers create a fresh dialogue with media so consistent and effective follow-up with these contacts is critical to the long-term success of the recently merged firm and necessary for building its reputation.

Positioned again through a client-service lens, immediate follow-up items might include a growth forecast for specific markets and industries or a new client success story that illustrates tangible benefits of the firm's new platform.

Meanwhile, a focused and proactive thought leadership program designed to position attorneys as subject matter experts also plays a key role in maintaining and raising the visibility of the firm and its priority practices in the media.

Mergers should be catalysts for law firms to establish a more robust presence in the media. But faced with the task of successfully integrating new groups of attorneys, many firms prematurely scale back public relations initiatives, thus quickly reducing their recently established foothold in the media.

A Rare Opportunity

With the law firm industry experiencing its most significant contraction since the 1990-91 recession, law firm merger activity is again on the rise and these mergers will be some of the most closely scrutinized combinations of the past decade.

Much more than a transaction, law firms need to carefully harness the rare positioning opportunities provided by mergers in order to develop a sustained media presence through which to engage clients, prospects and other key stakeholders.

John Corey is a founding partner of Greentarget, and president of its North American operations. He can be reached at [email protected]. Brian Kiefer is a vice president with the firm, and can be reached at [email protected]. They have handled communications for many of the legal industry's highest-profile law firm mergers during the past decade.