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Richmonte Wells Mergers Seminar Write Up
- AuthorDavid Gilroy
I spent a really enjoyable day today in the company of a bunch of lawyers & business development/practice management people.
They were all attending the excellent “Mergers for Law firms: how to look a gift horse in the mouth” being run by Sally Calverley of Richmonte Wells.
The seminar consisted of a morning of the theory (and some “practice”) of mergers followed by an afternoon of role playing/case studies around two firms who were thinking of merging.
At the bottom of the page are links to PDFs of the mindmaps I prepared during the day, along with the native Xmind file.
Law Firm Merger Theory - Morning
There were five presenters in the morning.
- Duncan Edler, Lloyds Banking Group - who did some scene setting around why mergers were a hot topic, what’s going on around Alternative Business Structures and some points on what the banks look for when it comes to helping finance mergers between law firms.
- Sally Calverley, Richmonte Wells - on why mergers fail. There was lots of information here but one statistic that stuck in my mind was that a survey by KPMG in 2011 (or mergers in many sectors, not just law, showed that :-
- 32% of mergers are “value neutral”
- 37% of mergers actually destroy value
- 31% of mergers do in fact enhance value
- Scary that, 69% of mergers needn’t have bothered happening!
- Trish Kinahan, Hazelwoods - with the accountants view. She concentrate on import points like are you comparing both sets of accounts against a common set of rules e.g. different firms might have different ways of calculating WIP and depreciation policies, both of which could impact profitability.
- Gary Horswell, Ntegrity - with great information from a PII perspective. Information on ring-fencing run off cover. How to evaluate PII cover as a proportion of revenue and how that helps you spot possible problems e.g. 5-10% is kind of OK, 15-20% is hiding/masking a problem.
- Sarah Bunker, Brasiers - was all about the people! Often overlooked or at least relegated behind what the Partners “want” and what the numbers say! There was information on TUPE, how to retain key employees and what to look at if redundancies are required.
Role Playing Law Mergers - Afternoon
This was the best part of the day. Sally and her team of experts had put together two case studies of small £500,000 - £1,000,000 turnover) firms who were thinking of merging.
The room was split into two and each half pretended to be one firm or the other. They discussed the case studies, which included a P&L and Balance Sheet and then had the chance to get input from the assembled experts (the presenters, others & yours truly).
Then there was real role play. A discussion ensued with each group pretending to actually be the firm they were assigned and watching the “dance” was very interesting. I can’t even begin to think what that meeting would have been like if it was two real firms.
The real learning came after the afternoon break. This was when each group got to see the other firm’s accounts. It was at this point that it really sunk in that a good merger is about so much more than just the numbers. It’s about :-
- your culture
- your appetite for growth
- your financial history, not just the current year
- your people
- your technology
- your clients
- your sectors & geography
and that’s not meant to be a definitive list.
In summary, if you get a chance to go on this seminar, go!