Which comes first? The Layoffs or the Merger?
In today’s rumor mill, Winston & Strawn and Heller are in merger talks. Substantiating the rumors, according to Legal Pad, is the supposed registration of WinstonHeller.com and HellerWinston.com.
While Heller is not on record of laying off attorneys, they have seen the departure of numerous partners these past few months. In addition, they are on record for staff layoffs last year.
Begs the questions, which comes first? Layoffs (or a reduction in headcount through “performance” reviews) or a Merger?
Having been in-house at three firms during merger negotiations (only one took), and through observations of other mergers through the years, it always seems that attorney headcount goes down during the courting period. Departures can be attributed to: 1) one firm cleaning house so as to make themselves more financially attractive to a merger partner; 2) conflicts, either clients or issues; or 3) productive attorneys leaving on their own accord who don’t want to be part of the merged firm; and, 4) an internal bleed that can only be stemmed by an acquisition.
For anyone looking in from the outside, the attorney departures might have been a tip-off that something was a comin’, no matter what the cause.
So, Coolerites, what are the external signs that point the way to a shotgun marriage between firms? Headcount reductions? AmLaw rankings drop? Departure of senior administrative staff (redundant positions??)? Registration of new domain names?
Heather,This is sort of off the topic of mergers (BTW our friends at Holland & Hart just mergered (aquired?) a 50 attorney firm – announced two days ago maybe Mr. Beese can chime in when he’s out of the woods?) but I believe we are looking at a mature industry seeking a new business model.I’m seeing mutually advantageous departures in twosies and threesies here in Miami. Just got a message of another twosie this morning. This pair will do better on their own. They won’t be paying overhead for dead wood partners. They will keep the money they make – for the most part. I saw this work with a threesie and they are now, within one year, up to a sixsie, plus a growing staff. The clients love the personal attention. They are swamped with business. Good stuff. Quality matters. Sure, not for everyone – many matters need armies of peeps. But, for a great part of the world there is a shift in the way it does business. At the same time business is getting global it’s also getting local. New generations are working differently. Just MHO. We are beginning to see upheaval. There will always be large corporate entities and law firms to serve them. But as mega firms begin revisiting their business models and what’s possible I think we’re going to see more change. How long can we sustain pressures like we need only A-list clients or bet the company cases to be profitable? Nothing is going to happen over night. My goodness, no, its law. But, if the rumblings I hear are clear, law firm management is going to have to think ahead. For the 14 years I’ve been in the industry I’ve seen law firms play around with compensation models. I sense this is more serious than that. I’m not sure if it’s reaching all sizes of firms, but I think this most recent down turn in the market in general has created substantive discussions. I’m hearing more than let’s hunker down and tighten our belts.