Mergers

Legal industry authority Hildebrandt International reports that law firm merger activity is at an all-time high, with nearly 60 firm mergers in 2006. By joining forces, firms can expand their internal talent pool, broaden the scope of services they offer their clients and increase their geographic presence. Mergers also bring less quantifiable advantages such as increased reputation, competitive advantage and client roster. By merging, firms hope to create a more prosperous, more productive, more profitable organization.

However, while mergers offer numerous potential benefits, success depends on swift and skillful execution to integrate the newly-formed organization. To accomplish this, firms must complete two important tasks. First, they must successfully traverse a significant conflicts review process in order to preserve as many client and attorney relationships as possible. Second, they must integrate their business operations to enable effective firm management and peer collaboration across the joint entity.

The Problem

The conflicts challenge facing merging firms is burdensome, but manageable. All firms have existing processes for identifying conflicts. In the context of a merger, firms encounter two types of conflicts:

• Clients of the newly joined organization are now adverse
• Attorneys from both organizations have represented parties throughout their careers that are adverse to current clients

Given such conflicts, firms need to demonstrate the ability to create strong ethical wall protections to convince conflicting clients to grant waivers necessary to retain their business. This can be especially challenging in the high-volume, high-pressure context of executing the merger. Yet if firms are unable to resolve these issues and set up ethical walls in a timely manner, the risks include disqualifications, client and staff departures, negative press coverage and financial loss.

The IntApp Solution -- Wall Builder

IntApp has worked with several high-profile firm mergers specifically to address operational assimilation through solutions leveraging Integration Builder, and ethical wall requirements through Wall Builder. Embraced and endorsed as an industry standard by top-ranked AmLaw 200 firms, Wall Builder enables firms to demonstrate a best practices approach to alleviate client concerns and secure waivers required to preserve valuable relationships jeopardized by merger-driven conflicts. The value of preventing a single client departure warrants the strictest compliance available.

Confidential Matters