As long as there has been commerce, there have been mergers and acquisitions (M&A). The culmination of this trend seems to have been the 1980's and 1990's; will we see it continue through the first decade of the millennium? The trend is seen across all industries, and as the legal industry has moved closer to a shareholder business model from a professional partnership model, it too has experienced a trend toward this method of growth. The industry in the last ten years has seen this form of expansion change the landscape of the growing firm.

M&A: A Fact of Business Life
While the average law firm today is still a single office made up of six professionals, the high end of the market changed significantly during the 1990's. The size of the average top 100 law firms in 1990 was 360 lawyers. In 1999, the average grew to 510 lawyers. This represents an increase in average size of 70%. In Europe and Australia, where multi- disciplinary practices are allowed, the percentage change can appear even more dramatic as law firms merge with larger accounting practices. Some of the growth occurred organically, but the considerable changes occurred through the merging of practices. These firms were looking to become more competitive, and to provide better or more varied service to their own growing client base.

Mergers and acquisitions are a fact of business life. The rapid modifications in technology and the globalization of business have changed the demands on the industry. The M&A route can provide quick, effective entry into new markets or provide the critical mass to be a dominant player, a requirement in the current age for sustained growth. The legal industry during this timeframe has seen M&A activity affect their environment both within the professional practice firms and the supporting industries. It cannot be overlooked in the legal community that mergers and acquisitions require legal expertise and are themselves an industry sector for law firms. This fits the trend of firms extending their own partnerships in order to provide a global presence for their global clients.

Global Capabilities with Vendor M&A
Companies supporting the legal industry have seen the competitive landscape change through mergers and acquisitions. And, in accordance with the previous statement, the firms that are growing and becoming international are looking to their vendors to provide global capabilities. Examples of M&A activities among legal technology vendors are abundant. Law firms are recognizing that, while mergers between law firms change their landscape, so do the transactions that occur between their primary vendors. This is especially true in the technology-driven sectors.

Compatibility with All Technical Systems
In a merger opportunity, it is important to remember the technical systems that support the business effort. The typical law firm is deploying a variety of systems from a variety of vendors. Not having the same or compatible systems does not restrict firms from completing the business transaction, but it does mean that the support infrastructure needs to undergo complete investigation to fully integrate operations. This can introduce cumbersome internal processes that did not exist prior to the combining of the firms. The infrastructure may also be outgrown on both sides by the combined size of the merged entity, requiring a complete system review.

The hard costs attributed to the purchase of the systems are not the only issues that affect the business post-merger, but rather, the ability to manage the system or systems during the transitional period. This can range from having to run two complete systems to manage the business, to operating a single, heavily overloaded system. Both can imply hardship and dissatisfaction to the result of the merger. For the professional, this can manifest itself in longer turn-around times for file opening, billing and reporting. For the firm, this can increase operational costs and produce a negative cash flow impact as turn- around times increase.

Turning Two or More Firms into One
Mergers and acquisitions are a reality of doing business, and they affect all businesses. Unlike some public acquisitions that can be used to squash competition, mergers in the legal industry generally extend business capability. Even under the friendliest of conditions, all aspects of the merger must be considered and understood to determine the length of time required to turn two or more firms into a single, stronger entity.