Merging the cultures of the global law firm

Size matters – so Renault would have us believe.

Its current television advertising campaign wittily captures the dictum, currently so much in vogue, that “biggest is best”.

Preoccupations with size have spawned an age in which merger-mania is rife and countless businesses seem intent on consuming their nearest (and sometimes larger) rivals.

All this activity is undoubtedly good news for corporate and financial advisers, not least those in the legal industry. However, no longer content with standing at the side of the action giving advice to the players, there are several law firms that now wish to participate in the game.

It is possible for a law firm to become very large indeed and to have real global reach without embarking upon any significant merger activity.

But the speed and extent to which the business world has become a seemingly seamless and single (not to mention unsleeping) place in the last few years has been one of the phenomena of our time.

Any national-based law firm that wishes to respond to this development by becoming a (more) global enterprise has generally had little realistic alternative to considering a merger.

The firms that will result from the current spate of mergers will be sizeable, in possession of significant resources, and have real global presence.

So what are some of the main challenges these firms will face?

For any business merger to bring the benefits anticipated from the resultant economies of scale, there must be a true interweaving of cultures and the development of a new sense of common purpose.

In an industry such as the law, where a firm’s principal assets are its people, the melding of cultures is especially important. And when different nationalities are involved the challenge is all the greater.

Given the identity of the countries from which the main impetus for global expansion has come, the major constituent part of any merged firm is invariably from London, New York or another major US city.

It would be easy for those who come from the major partner to continue to think and behave as if the culture – and national characteristics – of that major partner will continue to predominate. While this is only natural, such an approach would risk being highly corrosive of the “one firm” mentality so critical to success and must be avoided.

Of course, the ultimate test for any merged business is in the marketplace. Will it be able to offer a better product and do so more efficiently and cost effectively?

Notwithstanding the scepticism expressed in some quarters, there undoubtedly are many large international purchasers of legal services which are attracted to and find real benefits in the one-stop shop. And brand power among major firms is already significant and is increasing.

However, whether created by merger or otherwise, the most successful global firms will be those best able to seamlessly manage their communications, technology, knowledge and people across the world, while avoiding organisational constipation and maintaining a consistent level of quality.

So although it is hard to dispute the claim that in business, as in so much else in life, size does matter, whether you are selling motor cars or legal services it’s what you do with it that counts.

Russell Lewin is managing partner of Baker & McKenzie‘s London office.