Maintaining Your Client Relationship Following its Acquisition by Another Company
Written By Shannon Henson, view original article by clicking here.
Law360, New York (February 16, 2010) –Lawyers have long assumed they will lose business when their client is acquired or swallowed up in a merger. But in an era when the bottom line can trump personal loyalties, law firms that embark on a mission to woo the new occupant of the general counsel’s office may end up retaining the business they gave up for dead.
Legal industry observers said that while it may be difficult for a law firm or attorney to keep business after a client is acquired, lawyers shouldn’t just give up. Having multiple contacts within a company, putting on a killer business presentation and showing sensitivity about billing can help a firm keep its seat at the table, consultants said.
“In the old world, lawyers perceived the fact that a client was going to disappear in an acquisition, viewed that fact as an end to a relationship and instinctively billed the crap out of the client so as to make up for the loss of the previous revenue stream from the client,” said Jerry Kowalski, founder of legal consulting firm Kowalski & Associates.
Mergers and acquisitions have long been considered a losing proposition for the outside counsel of the company being acquired.
The stumbHng block is that an acquisition often results in a shuffling of the deck chairs in the general counsel’s office. Since the general counsel is usually a lawyer’s best contact within a corporation and frequently the person who hired outside counsel, many firms believe they are out of luck when there’s a change.
liThe big problem is the extent to which the person who is responsible for handing out work is either stripped of authority in a merger or is no longer there,n said Gary Klein, president of recruiting firm Klein Landau & Romm Inc. “At that point, it’s every person for themselves.II
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When faced with such a situation, many lawyers tend to sit back, said Toni Whittier of Whittier Legal Consulting. “They don’t know what to do, and they don’t want to press their contacts who themselves are in a time of transition.”
The attorneys who have multiple and broad relationships within a company are well
positioned when their client is acquired, said Whittier and Frank Michael D’Amore, founder of
Attorney Career Catalysts LLC.
“A lot of time the management of a company is taken out, and frequently a general counsel is taken out,” D’Amore said. nIf you have solid relationships with multiple people, it’s invaluable when an acquisition is made.1f
An attorney isn’t necessarily out of luck, however, if she loses her contacts within a company. Legal consultants said a firm should try to get an appointment to make a pitch to the new decision makers.
Once it is in the meeting room, D’Amore said a firm should detail its lengthy relationship with the acqUired client and showcase how its knowledge and expertise “cannot be replicated overnight by another firm.1I It would also behoove the law firm to look at the big picture and show it is aligned with the acquiring company as well.
“The law firm should say, ‘While we did all this work for XYZ company, we also have a good handle on your business and the industry you are in. Not only can we continue to do the day-to-day, but we can do it in a way that is consistent and in sync with what you do,” D’Amore said.
Whittier said a law firm should have a game plan for how it can lend a hand during the transition. It may be possible to help with the employee handbook or prOVide training, she said.
If a law firm can put together a persuasive presentation, “acquiring companies will be pleasantly surprised at the aggressiveness and proactivity” of the attorneys, said Michael Rynowecer, president of BTl Consulting Group Inc.
Consultants said cost sensitivity should be a component of such a presentation. Not having to pay for a law firm to get up to speed on the issues is obviously one savings for a corporate client.
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“I think all of the lessons learned from the recession should be a part of a pitch,” Whittier said. “Law firms know clients are sensitive to rates and staffing, and those lessons should playa part in the mechanics of a pitch.”
Showing an openness on fees, consultants said, might be the extra nudge that keeps a law firm on a client’s speed dial.
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