enterprise social networks and law firm mergers

Aaaah! The joys of fall. The leaves are turning, there’s a cool breeze in the air, kids are getting ready for Halloween, and the smell of mergers is in the air….

Wait? What?

Yes, that’s right.  This fall we’re hearing lots of chatter about new possible mergers in the works in the legal marketplace.  It seems the unrelenting competitive pressure is pushing more and more AmLaw 100 firms to search out potential partners in the race to bulk up and become truly global players.

And as more large law firms go through the merger dance, they would be wise to consider the immense value that social technologies can provide during the process of the successful implementation of a merger.

Every large business combination poses a series of major challenges. When negotiating a deal you have to contend with the financial and structural issues, antitrust concerns, the tax implications, and so on. But as many veterans and seasoned M&A practitioners will tell you, the biggest and most difficult challenges in making a merger successful usually arise post merger when it comes to actually integrating the two entities. 

Deloitte recently conducted a study that identifies four categories of post-merger risk: synergy, structure, people and project.

Synergy risks encompass the following: quality of financial figures, complexity of synergy goals and execution plan viability.

Structural risks include: organization and management structural differences and business processes heterogeneity

People risks are identified as: realignment at the executive level, changes at the managerial level and the extent and direction of downsizing

Project risks include: lack of expertise and limited human resource capacity.

Social technologies are incredibly valuable in ameliorating all of these post-merger risks.   Most importantly, an Enterprise Social Network (“ESN”) provides an excellent platform for all the employees across newly merged entities to being thinking and acting as part of a unified whole. Lets take a look at the specific risks identified by Deloitte:

Technology: Most ESN’s are cloud based which allows for their rapid deployment. Most ESN’s are also web-based, which means that users only need a browser to be able to access them from anywhere at any time. Most ESN’s have built-in API’s and third-party application stores, which allow for the integration with legacy enterprise systems such as CRM’s, ERP’s and Document Management systems such as Microsoft Sharepoint.  And most ESN’s have mobile capabilities which permit users to access them remotely from their smart phones or tablets.

The post merger integration of disparate enterprise technologies and systems can be an extremely long and arduous process. Imagine merging a firm that uses Microsoft technologies with a firm that uses the IBM platform.  It could take many months or even a year to accomplish the migration or consolidation on a single system. But deploying an ESN cross-platform and across the whole organization can happen in less than a month.

Communication: Perhaps one of the most critical components of a successful merger is ensuring that everyone is on the same page. Here again an ESN can prove to be invaluable.   Establishing a central repository for all critical information during post-merger integration is critical.  And it has to be readily accessible to everyone across the organization.  The features and functionalities of an ESN make it the perfect platform to accomplish this.  Users can also post questions and either management or other users can provide answers.  There is no need to connect email systems and create huge mailing lists. With an ESN everyone at both firms can get access to the information they need, when they need it.

Culture: Most people who have gone through a merger will tell you that the number one challenge faced by companies during post-merger integration is bringing together two different cultures.  There are often huge cultural differences between merging firms, which leads to lots of awkwardness once a merger is consummated; members of one team can often feel isolated.  An ESN provides a fantastic platform to bring the cultures together.  It functions as a kind of neutral ground – truly shared space — where colleagues can start functioning and thinking of themselves as part of a single team.   It provides an easy way to learn about new co-workers, interact with them, and forge new bonds.  This virtual community will be forged just as effectively with partners stationed in Shanghai or Dubai as right down the hall.

Business processes: As described by the Deloitte study, business process heterogeneity often poses the single biggest risk for post merger integration. Each company involved in a merger has existing business processes deployed to accomplish various objectives. Integrating the business processes across two formerly separate entities is an extremely complicated task, requiring significant time and effort.  ESN’s can most definitely assist in this effort and in some instances the ESN itself will provide a new process or a more effective way to carry out a pre-existing process that takes good advantage of the ESN’s social functionality.   Here again, using an ESN to introduce a new process is an excellent way to ensure that everyone is on the same page and understands how the process works.

So there you have it.  There are lots of reasons why a large law firm stands to benefit from implementing an ESN.  When large law firms merge with each other it may prove even more critical in solving some of the thorniest problems with post-merger integration.    It’s not just a matter of realizing synergies.  With an ESN in place, a newly merged organization has a much quicker means to begin talking and thinking and acting as one.

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