Don’t neglect your clients: three moments in a successful merger
Could it be any clearer? The research participants in The Dating Game speak with an almost unanimous voice: 95% say there will be more merger activity in the legal sector over the coming two years.
Given the diverse and systemic factors shaping the legal sector – increased competition from new legal service providers, clients becoming ever-more demanding about the price and value of the service they receive, and a downwards trends in profitability – more merger activity, in my view, is inevitable.
As firms merge they should not neglect their clients. What sets successful mergers apart from those that don’t generate long-term value is a focus on understanding and adapting to the needs of clients. This is particularly important during three key moments in the merger process:
1. Choosing a merger partner.
There has to be a clear strategic rationale for two firms to merge. Put simply this often mean an enhanced ability to selling more services to more clients. For this to happen, however, there has to be a high degree of similarity between the types of clients that both firms service. Will a merger create genuine opportunities to cross-sell to clients? Or will it just dilute and confuse the proposition your firm offers to the market?
2. Communicating the merger
The survey reveals that communication is critical to a successful merger. How and when clients are kept informed of a merger can have a significant impact on their likelihood to react positively to the news, and even to advocate the benefits of the merger to their colleagues or peers. In practice this means thinking very carefully about how the merger will be positioned. What will be the short and the long-term benefits for both existing and potential clients? How will you allay any fears about disruption in levels of service?
3. Post-merger integration
In all my time speaking with clients of law firms, the most common outcome of a merger is that client satisfaction dips in the months following the merger. This is because firms tend to focus their attention inwards – aligning internal systems, restructuring teams, ironing out remuneration systems – rather than focusing on delivering exceptional service. A merger offers a perfect opportunity to reaffirm and redefine your commitment to client service. How will you take the best client services approaches of both firms and combine them into something even better? Do you have a mechanism for capturing feedback from clients through the merger process and beyond?
Alastair Beddow is associate director at professional services consultancy Meridian West. He helps law firms to define and implement their client and business development strategies, including branding, client service and proposition development.