Questions to ask potentional employer who is an attractive merger target?

April 21, 2006 12:45 AM

I am considering accepting a job offer from a law firm that considered merging with a larger law firm within the past few years. The law firm I am considering going to has a reputation for being a good place to work because of an emphasis on collegiality, balance, etc. Most other firms in the area, including those most likely to be discussed in a merger, don't. What questions should I be asking to ensure (to the extent that I can) that if I accept this job, I won't find myself at a very different type of firm in a few years, due to a merger? I mention that the industry is law only for clarity's sake-- I imagine this scenario is common in many industries, and I'm curious how others have handled the situation.
posted by Harvey Birdman to work & money (13 comments total)

I don't think there's really anything you can do, other then quit if the company merges with the one you don't like.
posted by delmoi at 1:04 AM on April 21, 2006

Hi,

You don't mention which country/state you are in, as this might affect the answer?

In the UK, there is TUPE ( Transfer of Undertakings (Protection of Employment) ) which will protect most of your pay and conditions (e.g. paid leave etc.) in situations such as mergers, takeovers, outsourcing etc. It doesn't (or didn't) necessarily protect company pensions, as this sort of thing is company-specific.

There's not a lot you can do other than quit if your issue is with the culture of the company rather than anything specific.

I have known people in a similar situation in different industries; look at past history, ask around your network of contacts in the business, but have an escape plan just in case.

Be sceptical of what management tell you as situations change and they be in the dark themselves.
posted by plep at 2:07 AM on April 21, 2006

You will have to make a judgement about how much you trust the partners to make the right decision about a merger on your behalf. You should be asking them what makes the firm special to them - if they say that it's the culture then you can to some extent hope that they won't merge with a firm that would destroy that (on the grounds that they will still have to work in the newly merged firm too). If they reply (or you think) that it's about the cash for them then you may want to think again. There's a trade off too - how much change would you tolerate for improved pay or prospects or the chance of global work etc.

That said, depending on your practice area you could be likely to be able to get out if the merger goes wrong. At any time of upheaval the headhunters will start swarming round and there're also likely to be disaffected partners who will look to move and you could go with them.
posted by patricio at 3:11 AM on April 21, 2006

I work at a large European firm that absorbed a smaller but excellent firm. Two years later, this firm is still somewhat on a separate track...a part of the main firm, but still very distinct. While I'm sure the results of mergers vary widely, I wouldn't assume that you guys would all get dumped in like employees at the other firm. At least not right away.
posted by BigBrownBear at 3:22 AM on April 21, 2006

Law firms are courting each other constantly. I've worked at one for 6 years, and we've been the bigger fish in all 5 of these I've been a part of. We're in serious talks about #6; this will make 4 in the last year alone.

You can't worry about other local firms. All the firms we've acquired were in different states and different countries.

My point is that this trend is not going to go away. Others here have stated it more eloquently, but the only thing you can do is develop your work reputation; everything else is out of your control.
posted by xena at 5:26 AM on April 21, 2006

One question to ask or research yourself is how many attorneys the larger firm has in the city office where the smaller firm is located. I am in somewhat of a similar situation, although the firm I am going to work for has already been swallowed up by the larger firm (about a year ago). During my interview process I asked everybody how that process had been -- the larger firm had a negligible presence in the market prior to the merger, so when they bought the smaller firm, it was the smaller firm's culture that continued to dominate the way business operated within that city (billing less than other offices, collegiality, etc)

One of the things that struck me was that the partners who had been around from the beginning at the smaller firm had stayed on after the acquisition, which I believe helped ensure that the culture was not changed too dramatically. I think when you talk with partners, try and get a sense of how much pride they have in the firm and their part in building it up to what it is, and whether they have more than a financial connection. I interviewed with another smallish firm that hadn't merged with a larger one and the name partner told me straight out that he had built the firm with the idea that it would become global, either by the firm's acquisition of even smaller firms, or by being acquired themselves. There was no discussion about how a small firm feel differentiated it from the megafirm machines, and it was clear that this place was ripe for a merger, with the partners more than happy to turn the place into a sweatshop.
posted by buddha9090 at 7:40 AM on April 21, 2006

I imagine this scenario is common in many industries, and I'm curious how others have handled the situation.

In the computer industry acquisitions are a way of life. Any company you work for, up to and including major telecommunications firms, can be acquired with very little notice.

When you join a company, there is no way to predict who it will be acquired by.

One lesson that seems to have been taken to heart by everyone, though, is that acquired companies are best left intact. Usually the reason you bought them is that they perform a specific task very well, and it doesn't make a lot of sense to mess with their operations or culture when it was already working. Over time some acquired companies will be completely subsumed, but many will not -- they will retain their separate cultural identities while being part of the main company.

I don't know if that lesson has been learned or even applies for law firms. But for what its worth, in the computer industry:

1) There's no way to hedge against being acquired by a particular company.

2) Acquisition by an undesirable company does not mean that your company culture will be wiped out immediately, or at all.
posted by tkolar at 9:48 AM on April 21, 2006

As others have said, there's really no guarantee that your firm won't be acquired in a merger. There is a clear trend of the bigger fish gobbling up the smaller ones, and that will continue. Just take advantage of the training a larger firm has to offer, and when the inevitable merger happens, if you don't like the new vibe, then make a change. It's a reason that people understand, and trust me, the headhunters will be swarming around you when the merger happens.
posted by ambrosia at 10:21 AM on April 21, 2006

I'd say the difference between law firms and other businesses is the fact that law firms are partnerships so the partners are the only people who can make the merger decision - the firm can't be subject to a hostile takeover in which anonymous stockholders sell to the highest bidder. In that sense the managers who you work with day to day have a much greater say in any merger decision and are more able to prevent what they view as an unsuitable merger. You will be able to get a better (though not perfect) view of the likelihood of a change by speaking to them than you would by speaking to a division head in a normal business.

I work in a large European firm in which a small but vocal section of the partnership has blocked three potentially transformational mergers over the last six or seven years because they were scared of the possible culture change.
posted by patricio at 10:26 AM on April 21, 2006

Harvey, if they have already considered merging with another firm, then a merger in the future is very likely. Partners don't entertain merger thoughts unless they are convinced their profits require it. They probably still feel the need to merge to stay competitive. That has been the trend in the legal marketplace for years now.
posted by profwhat at 11:10 AM on April 21, 2006

Don't be shy about asking the people you interviewed with about merger prospects. Some specific avenues to consider:

- Are there any current plans to merge with a larger firm? What are they? If you can't tell me the details, can you give me a general sense of what is being discussed?

- What factors will the firm rely on in deciding whether to merge? Culture? Money? Practice group synergies? Office space/locations?

- I understand your firm considered and declined a merger proposal in the past. Why? Was the decision specific to the larger firm, or a more general philosophical decision?

- A major reason I'm interested in your firm is its culture. The reason I'm asking all these merger questions is that I'm concerned about a cultural change after I join the firm. Anything you can tell me that would address this?

You may get blunt answers to these questions. More likely, though, you'll get something fuzzier -- something like "merging is an option that comes up from time to time, although we aren't pursuing anything serious at the moment."

In any event, unless you are entering the firm as a partner (and it sounds like you aren't), you won't have any say over what happens, and you can't assume that any representations made to you in the interview process will be adhered to. If a merger is going to happen, it won't be held up by someone saying, "but we told Harvey Birdman we weren't going to do this." Which means you should just ask the questions that concern you, listen to the answers, and decide whether you're willing to take the chance that there will be a merger and that it will have negative consequences. Maybe it will be worth the risk.
posted by brain_drain at 11:43 AM on April 21, 2006

Large firms picking up small firms or botiques doesn't seem to present many problems for the larger law firm, but tends to present a host of problems for those coming from the smaller firm. The people I knew at Hale and Door are not happy being at Wilmer now because they had a strong culture that they feel was lost post-merger. I can think of many exampels of rank and file at boutiques being unhappy when merged with a megafirm. But in the end, brain_drain is right, if the partners want to merge, they are going to merge, and it is going to be driven primarily by business concerns, which can arise at any time. Even if you get honest answers that suggest no merger is imminent, that is no guarantee what the situation will be like a year down the line.
posted by Falconetti at 12:53 PM on April 21, 2006

Harvey is in Long Island NY USA
posted by Megafly at 5:59 PM on April 21, 2006