Feature

posted 31 Oct 2006 in Volume 9 Issue 6

Case study: Making your move

Lateral hires can be a sensitive subject – and not just for those firms losing hard-won talent to the competition. Integration with a new firm requires careful preparation and these challenges are magnified when it is a team that is moving. DLA Piper learnt a number of lessons from carrying out the largest lateral hire in UK legal history.

By Paul Pattinson, partner, DLA Piper

Mergers and acquisitions, and associated personnel issues, are a common enough occurrence, and in the legal sector, lateral hires of one or two partners happen regularly. So when law firm DLA Piper announced it had integrated 44 partners, solicitors and secretaries from the technology, media and telecommunications (TMT) team of Denton Wilde Sapte (DWS), many eyebrows were raised. This proved to be the largest lateral hire in UK legal history. Within DLA Piper it produced the largest single entity across the European and Asian offices of the firm (when judged by practice area within a single location).

This article will deal not so much with the initial recruitment, however, as with the challenges and key issues that presented themselves in combining the two teams. It will also consider whether that integration worked and the tests that can be applied to judge the achievement. In order to be considered a success, three main aspects needed to have their boxes ticked – people, clients and financial. The last of these follows naturally if you get the first two right.

Background

DLA Piper had a long-established technology, media and communications (TMC) practice, but one that was limited in scope. Part of its business plan was to expand its experience and expertise to be able to cover more areas in the sector, particularly in the media and entertainment industries. The firm already had a top-rated information technology practice and wanted to build on that team’s success.

Individual partners in the DWS TMT team were also looking to make a move and DLA Piper presented the opportunity for the existing team to stay together. Securing a team of this nature would enable DLA Piper to achieve its business plan at a stroke.

The designs and ambitions of both practices must also be seen against the backdrop of DLA Piper negotiating a three-way merger with two US firms, one East Coast and one West Coast. The process also benefited from the experience the firm has gained of assimilating newcomers during its own previous expansion.

The head of the DWS team was Simon Levine, who, together with the other DWS partners, found himself in discussions with Andrew Darwin and Julian Stait (then head of DLA’s TMC practice). By and large, therefore, this was a decision made at partner level at DWS and at a senior-management level at DLA. The majority of those who would be involved in the lateral move had no initial say in a decision that would change their professional working lives. Ultimately their views would prove very
important, however.

Challenges

There were three critical phases in the overall organisation of this lateral hire:

Before the move;
The arrival;
Longer term.

Before the move

There was a necessarily different approach for the individuals moving firms and those receiving the newcomers. On the DWS side, once the partners decided they would move together, the challenge was to persuade the team that a move to DLA Piper was the right thing for them. Clearly the partners’ ability to bring the team, and with it the ability to transfer the clients, was critical to the success of the move. For those individuals it was a decision that would depend on what was in their best interests – to stay or to go? Inevitably it was a fine balance, and the worry was always that persuasion by DWS would succeed in splitting the large team. Against that, once the partners had decided they would move en bloc to DLA Piper, the DWS management allowed the departing partners to speak to the solicitors and secretaries.

The transferring partners needed to persuade their teams that DLA Piper was the right firm and explain their reasons. It was, in many respects, a test of loyalty to the partners for whom they worked.

On the other side of the fence, DLA Piper needed to sell itself, but also to go through a full interview process to ensure a balance was kept. After all, DLA Piper was intending to take on the employment of the people. It needed to be satisfied of their quality. The individuals being interviewed needed to believe that DLA Piper would be the right place for them, that they positively wanted to join the firm and were not only coming because they felt they had to follow the partners they worked for. It was vital they all felt treated as individuals, and that they were being recruited for their individual skills. On this basis they needed to feel DLA Piper was positively the place they had decided they wanted to go to.

Interviews

The process adopted was to interview everyone individually. These interviews were conducted by two partners: myself (as the London location head) and one other partner. The interviews were business-like, efficiently organised and designed to leave those being interviewed with a clear positive message about DLA Piper (particularly concerning the talent of the DLA Piper staff they would be joining). It was also important, however, that this did not come across as just a formality.

Question and answer sessions were also arranged, with secretaries coming to meet people at DLA Piper, to see the offices and make up their own minds. Certainly, it helped that the partners involved in the new expanded TMC on both sides had previously met (and got on well).

For DLA Piper there was a very different proposition to address for the existing associates and assistants. They had no say in whether or not the 44 members of staff from DWS would join. Looked at simply, this could easily be seen as an invading army. It was therefore absolutely essential to explain all the positives that would come from the arrival as early as possible. It was equally important to listen to their concerns and to be realistic. Clearly, it would be impossible to ignore the negatives. Sweeping them under the carpet would just be storing problems that needed to be addressed head-on. This was particularly apparent in some individual cases where, for example, there would now be extra competition at a particular level of qualification. But in an environment that is inevitably competitive anyway, it was important for everyone to have a clear picture of the opportunities available for everybody. There would be a larger, more powerful and more wide-ranging department from which they could operate. There would be more partners with more diverse specialisms for whom to work. The thought that they were ‘being replaced’ needed squashing, which could be done objectively by persuading people there was a parity of quality at all levels of solicitor. This was actually a tougher challenge than the DWS non-partners were confronted with. Communication and dialogue were critical to seeing off the threat.

Indeed, communication and information were the enduring themes at this stage. The DWS people all needed as much information as possible about the firm they were about to join. The old preconceptions about DLA Piper that competitors are fond of fostering needed to be dispelled. In this case, the firm’s recent history spoke for itself.

A lot of information was provided. However, it was dangerous to rely on everyone reading every piece of information they were given. Meetings and discussions between individuals in both groupings is the best way to deal with concerns and give an impression of the prevailing atmosphere at the firm to be joined.

Several team meetings were also arranged, one of which was held soon after the DWS solicitors had been interviewed for a job, but before they needed to decide if they were going to accept an offer. This was only attended by non-partner solicitors from both firms, so it was clear to all concerned, but particularly for DWS solicitors, that they were likely to get honest answers. The other side of this coin was that the DLA solicitors could meet and judge their future colleagues for themselves – and were able to satisfy themselves that while there may be additional challenges involved in the increased size of the department, this was only a threat if they chose to see it that way.

Other meetings involved everyone: partners, solicitors and secretaries. These were all successful and demonstrated to everyone concerned that there were few real barriers to a successful integration of the two groups.

The arrival

There is only so much you can do before a group of this size arrives, in terms of both helping them become familiar with the new offices and assisting in the introduction to future colleagues.

Geography was one important concern. Everyone who was to arrive at DLA Piper had been shown round the offices at the time of the interviews and a number of parties had been held in the DLA Piper offices.

But the real geographic issue, consuming many hours of discussions and planning, was how best to integrate everyone upon arrival. There were various alternatives here. Should all ex-DWS staff and existing DLA Piper staff be mixed up randomly, allowing no room for remaining in one familiar silo of people? If it had been possible to have everyone sitting on one floor, it is likely this route would have been chosen. It would have meant that to visit a colleague in your own specialisation for example, in film finance you would need to pass and at least greet colleagues from other areas such as intellectual property (IP) or sport.

We were not all able to fit on to one floor, however. This was now a department of over 90 staff As we were spread over two floors, there was also little business sense in having a completely random mix, which would be likely to prevent individual specialist groupings from performing efficiently. Instead the firm selected a compromise arrangement, attempting to balance the human factor and the business sense. The small specialist teams were kept close to one another, but were interspersed with others from the larger groupings. For example, there was a liberal sprinkling of IP and other media specialists among the film-finance specialists. Most rooms are for two people, meaning those in the same specialty share rooms. Without this, the element of on-the-job training would have been lost.

As a large and diverse group, intellectual property is the glue that binds all the specialists working in IT, TV, broadcast, sport and film, so these solicitors were spread among the other teams, but all on one floor. A seating plan was provided to everyone in the team before arrival.

First impressions

New arrivals’ first impressions are critical. If any doubts remained as to the wisdom of having moved – particularly at non-partner level – and things went wrong in the first few days, this would add to those doubts. It would increase cynicism and encourage people to take a step back from full involvement in the life of the firm.

Preparations therefore included ensuring no glitches in IT and telecommunications. All PCs and telephones were set up – and the systems tested many times before the actual arrival. In the event it worked very smoothly and a team of floor walkers was on hand to deal with any difficulties.

While initial impact was vital, however, a full induction into the firm’s systems and differences had to follow. This took place in the initial few weeks, amounting to a gradual introduction to the wider aspects of the new firm.

The longer term

It is very easy to breathe a sigh of relief after the first few days, congratulate yourself on a smooth move and let everybody get on with their lives. That would have been a mistake. It is essential to continue with a combination of artificial opportunities to let people get to know each other better and providing more information on exactly what everybody does within the group and who their clients are. There were whole new areas of work and specialism coming in, unfamiliar to DLA Piper, and there were aspects of the existing DLA Piper TMC practice that needed explaining to the new arrivals. There were also new clients unfamiliar to both sides. Workshops and presentations go some way towards filling in those gaps but these inevitably depend on people being available to attend sessions. In a busy, client-focused organisation this becomes increasingly difficult, but the opportunities still have to be created.

The key to a successful integration is working together on projects, whether client or office-based. Wherever possible, it is important for partners to work with solicitors they have not worked with before. A certain leap of faith is necessary – that the people with whom a partner is not familiar are as good as those they know to be so. In our scenario this was easiest in IP, as there are two sets of specialists coming together, doing broadly similar work and where skills are easily transferable. In other areas, such as film finance and sport (where there is no cross-over), the integration had to rely much more on communicating information and helping people to get to know each other.

There has to be a balance between artificially created opportunities and those that are practically driven. After a while artificially created opportunities lose their mass appeal. Some people will always mix better than others and guidance is needed. This is one area where the question of leadership manifests itself.

In the case of this move, Simon Levine, who had been the head of the group at DWS, was appointed as the head of technology, media and communications (TMC) at DLA Piper. Of course, there was potential for this to add to the feeling that this was a takeover – and that priority would be given to the DWS staff and partners. A natural balance was ensured, however, as I was the location head of TMC in London, responsible for the budget and staffing issues of the London office. Right from the start all partners and staff had someone they could refer issues to as they quickly grew more acquainted with each other. If anybody had an issue arising out of the joining of the two groups, they had an easy route to follow to air their views.

Evaluating success

In looking back over the whole process I think there were five essential elements from which the detail was derived. Those can be encapsulated as the ‘five Is’.

Integrating – both physical and cultural;
Individuals – treat everyone as an individual with particular concerns;
Involvement – derives from treating people as individuals and helping them to understand;
Impressions – first impressions of people, places and systems are critical;
Information – it is hard to provide too much.

What are the tests of whether this has been successful? To our minds, there are three tests to apply:

‘People issues’ – judged by the fact that only one fee-earner left the group in the year following the merger;
‘Client issues’ – 95 per cent of the new team’s clients accompanied them in the move;
‘Financial results’ – after eight months the combined group had hit 105 per cent of its target.

Finally, did everyone feel things had worked well? After just seven months the turnout for the group's evening Christmas party was over 90 per cent of all the partners, solicitors and secretaries.

Paul Pattinson is a partner at DLA Piper and is the London location head of the technology, media and communications group (TMC). He can be contacted at paul.pattinson@dlapiper.com.