A report from legal consultant Altman Weil Inc. found 2017 was a record-breaking year for U.S. law firm mergers. Mergers have been on the rise since 2010, with 102 confirmed mergers last year alone. The year’s biggest combination was Womble Carlyle Sandridge & Rice LLP’s deal with British firm Bond Dickinson LLP, creating a transatlantic firm of 1000 attorneys.
With more law firms looking to acquire small, high-quality firms to buy market share and differentiate themselves from competitors, the merger market is moving at record speed. Jayne Durden, VP Solutions Marketing and Strategy at CPA Global discusses how we partner with law firms during a merger and what the new environment could mean in the future for law firms.
How does CPA Global work with law firms during mergers?
We help law firms to achieve a successful transition. Depending on the situation, this can range from helping to seamlessly merge IP portfolios with our connected IP management software to providing support teams during the merger so that critical dates are not missed in the transition.
In January 2011, Kilpatrick Stockton LLP – one of the largest general practice law firms in the US with a prestigious IP practice – merged with IP specialist firm Townsend and Townsend and Crew LLP. Both were faced with consolidating two massive IP portfolios and set an ambitious eight-week goal to complete the database integration. After partnering with CPA Global, we successfully consolidated more than 300,000 IP matters into America’s favourite IP management software – FoundationIP® in just two months, minimising overall risk to the organisation.
Mergers can be distracting and time consuming for internal staff at a firm. Our team provides unrivalled support to during complex mergers, helping align processes and best practices. We help load cases, verify case data and open new matters in IP management systems, freeing up time for firms to concentrate on their clients.
Has the rapid increase in mergers changed how CPA Global works with law firms?
Law firms are constantly changing and need to differentiate to stay ahead of competition. In this landscape it is critical law firms identify trusted partners who understand IP – not just general legal processes. IP is unique in terms of its resource requirements and risk. To meet these needs law firms are asking more of industry partners and working collaboratively to make the merger process more efficient.
What challenges do law firm customers face during mergers?
During a merger, clients can take the opportunity to shop around for new counsel and move away if firms do not work hard to mitigate client concerns. It is essential for law firms to balance being very client facing with the large workload, merging processes, documentation, systems and people. It is a tough balance and one or the other tends to get less focus impacting the firm brand.
There is also immense risk involved in merging two firms, especially in IP. If case data is wrong when it is transferred, patent rights can be lost, resulting in a risk of losing the client or even being sued. Firms tend to track information differently so that merging IP management systems is never as simple as plugging data into a different system. The firms’ data might also be dirty, not accurate, or out of date, meaning that the new database is populated with risky data.
Why has there been an increase in law firm mergers?
Law firms understand that one way of competing with other firms is to gain more clients and hence more cases. Mergers are the fastest way to grow, but they can prove problematic. More clients mean more processes and people thrown into the mix. This has resulted in huge pressures on IP firms where there is still a shake out of firms that have not managed to be profitable.
What are your predictions for future law firm mergers?
I expect the number of law firm mergers will continue to increase. There is no sign of activity slowing around the world and firms in the UK are starting to follow suit. Recently, the IP specialist firm of Cleveland Scott York was formed following the merger of Cleveland IP and Scott & York IP law, while boutique IP law firm Redd – the firm that has represented LinkedIn – has joined Wiggin.
I think we will see firms gaining a reputation for being easy to merge with, with efficient internal processes that help minimise risk. This will help attract strong talent for single practitioner or group mergers to continue.
Partnering with IP management and technology companies – such as CPA Global – will help law firms simplify the merger process of their IP portfolios. Initiating processes that effectively integrate IP databases and protect valuable IP assets will prove beneficial for law firm businesses and their clients.Are you coming to INTA this year? Why not join my table topic session on Mergers & Acquisitions: Top Five Do’s and Don’ts on Wednesday, May 23rd from 8:00 – 10:00 am.