Three weeks ago I was asked by the managing partner of a 16 attorney insurance defense firm about staffing and growth models for an insurance defense firm and I listed the following models and discussed the first model - grow your own associate staffing. Over the past two weeks in other posts I have discussed models 2-5.
Attorney staffing/growth models include:
- Grow Your Own Associate Staffing
- Lateral Associate Staffing
- Contract - Staff Associate Staffing
- Lateral Partners (Equity or Non-Equity)
- Of Counsel (Various Approaches and Purposes)
- Mergers (Or Small Firm Acquisitions)
This week I will outline the pros and cons for number 6 and 7 - Mergers and Branching.
Mergers (or small firm acquisitions)
- Quicker access to talent, expertise in a new practice area, and client book of business.
- Access to infrastructure and resources.
- May enable the firm to fill in weak spots quickly.
- Risks of a wrong business marriage. (The larger the target firm the greater the risks)
- Issues involving integrating the firms.
- Control issues.
- Conflict of interest issues.
- Compensation - money, approaches, etc.
- Cultural incomptability
- Management time to evaluate the feasibility of the merger.
- Using approaches listed above.
The appropriate strategy is often a mix or combination of the above approaches. Need to drill down into the financials and review past experience concerning breakeven point for profitability of your attorneys, costs/overhead, fee collections, time, and profit margin.
Often the WHO dictates the WHAT (specific strategy)
John W. Olmstead, MBA, Ph.D, CMC