New York Lawyer
August 1, 2002

Q:
Our firm merged with another firm two years ago. You would think by now the problems would be ironed out and that we would be "one firm" by now, happy and serene. That�s not the case.

I don�t think we�ve ever really gotten over the feeling of two camps.

Things like, people still refer to people by their old firm names (he�s a "Smith, Jones" guy) rather than always referring to the new firm name. And there�s lots of criticism on each side.

The people from the previous firm that I belonged to think the new people just aren�t that smart, kind of tacky, don�t do good legal work. They think we�re snobs, trying to be intellectual and overbearing.

There�s no real cross selling or anything -- in fact, there�s not much mixing of associates and partners from the previous firms. It�s just like two firms were brought together under one roof and are operating pretty much as always.

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A:

This is an all-too-frequent story about merging. If it makes you feel better, mergers in the corporate world generally don�t go much better. Most of the time, they fail to show increased returns for shareholders. Although some merger issues are business-related, much of the time the problem boils down to "cultural" issues, best encapsulated as "the way we do things is better than the way the other folks do things." In many merged corporations, people still talk about their old companies five or 10 years after the fact.

Given that the people in the merged firms are the ones who actually have to produce results and do the work, it�s amazing how little thought is given to meshing the two cultures in a merger. That�s generally assumed to happen by itself, almost in a dismissive, condescending, "they�ll learn to get along on their own" sort of way. It�s as if paying attention to how people relate to one another (the lifeblood of any organization) is beneath anyone�s dignity to bother with.

This is wishful thinking. Left to their own devices, people in merging firms turn defensive, resistant and catty. Just to give a small example: I know of one place where the newly merged entity decided not to offer free chocolate cookies anymore, which had been a quirky hallmark of one of the firms. There was practically blood in the hallways in response. Just translate that kind of passion into the thousands of other details that go into working together on a daily basis, and you can see that mergers aren�t easy.

So: what to do? The first thing is to recognize that this is an issue and not something to be haughtily dismissed. Just read the literature on cultural issues in merging and it will be quickly apparent that this isn�t a small point. Next, there should be a structured effort to help the two work forces get to know one another in a comprehensive and positive manner, not by anecdote, chance observation and out-of-control rumor. This can be in the form of social occasions, focus groups and roundtable discussions led by facilitators, vibrant and frequent communications, specific one-to-one efforts to bring together people who can help one another in practice, etc. In other words, there needs to be a plan, not an ad-hoc lurching along.

Finally, it�s important to develop criteria to measure cultural progress. This is not how much more money you make together rather than separately, but instead how well you have mingled your people and resources. Get a vision in your head of how you want the firm to look in a few years, and break down the indicators of progress that way. You can then measure, for instance, how much cross selling there is, how many times people from one firm are drafted to work on an assignment by people from the other firm, even how frequently people refer to their old firm name rather than the new one. These are just examples; there are countless ways to measure cultural progress. By the way, you can be part of the change effort, too -- think about ways that in your own universe you can hasten the melding together of the two firms, and get right in there rather than just assuming that you can�t have any effect.

If there�s some thought in the process, your firm will have a much better chance of truly becoming "one firm" rather than just co-existing as two firms under one roof.

Sincerely,
Holly English
Principal Consultant, Values at Work