Perils and Pitfalls of Merger Negotiations

A decade and a half ago, I stood in the crowded main conference room of Maryland third largest law firm. Earlier that Monday morning, driving into work, NPR blared on my radio the news that the partners of the firm had convened an unheard of Sunday shareholders' meeting - and voted to dissolve the 140 year old firm.

In cemeteries throughout Maryland, the skeletal remains of attorneys long gone rolled over in their graves.

It would take days before I realized how much orchestration, how much conniving, how many smoky back room deals must have been cut over the preceding months, and how much backstabbing must have occurred in order for that vote to have even taken place. And to have the news broadcast throughout the greater metropolitan DC area less than 12 hours after the vote - with only a Sunday night intervening? Well, that just defines the breadth and depth of the planning.

Standing in that conference room, the office's managing partner assured us that - as an office - we had merge into the firm just two years earlier as a whole - and we would simply merge ourselves into another firm as a whole. No one left behind. Take us as a whole or not at all. Noble words - but demonstrative of the dangerously naive business sense most attorneys carry with them.

The core group of rainmakers began negotiating with other mega-firms in the area. Their noble words turned to empty deeds when the negotiating committee cut a deal for themselves only - leaving everyone else in the lurch. It all comes down to self preservation - and when forced to make a decision at the negotiating table between saving themselves or holding out more a more inclusive deal, the rainmakers justify their survival-of-the-fittest Darwinian decision by convincing themselves that they have already taken care of their employees by providing years of prior work - and that it's simply time for them to leave the nest and fly away.

I was one of 5 who helped dissolve and liquidate the firm - and 'twas not a pretty sight. A lot of butt-hurt people whose years of loyalty to the rainmakers bought them nothing but COBRA rights.

Now, it's deja vu all over again. My existing firm is in merger negotiations - and even before it begins in earnest, the Darwinian mentality is seeping through - despite the reminiscent speech to the masses that we will only merge if we can bring the whole firm along.

Riiiiggggghhhhht.