Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. We are a 22-attorney firm located in Pittsburgh. While we represent both individuals and businesses, our focus is on small business representation. During the past few years we have come upon hard times. We have lost several partners and a couple of business clients and we have a few partners coming up for retirement. Several of our senior partners have suggested that we might be a merger candidate for a large law firm. What are your thoughts?

A. Don't count on a larger law firm coming to your rescue unless:

1. You have a practice that is strategically important to the larger firm (all practice areas).

2. You have an exceptional bench of superior lawyer talent with mixed age spread.

3. Your firm has had exceptional financial performance and on a par with the larger firm.

4. Your billing rates, methods, and practices are on a par with the larger firm.

5. Your partner earnings are on a par with the larger firm.

Unless the above ingredients are in place the firm may not be a suitable candidate for merger or it might find that the larger firm cherry picks some of the key partners off one by one.

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John W. Olmstead, MBA, Ph.D, CMC,(www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.