Assessing success in large law firm mergers: a neo-configurational approach

Millard, Robert Frank (2024) Assessing success in large law firm mergers: a neo-configurational approach. PhD thesis, University of Glasgow.

Abstract

This study identifies configurations of antecedent conditions that are consistent with success in large law firm mergers. Practitioner perspectives concerning merger motives and factors causal of success are distilled into propositions and conditions reflective of those and tested using fuzzy set qualitative comparative analysis (fsQCA). The study analyses 73 mergers that took place from 2002 to 2017 in which at least one firm was headquartered in the U.S. or U.K., the target firm consisted of ≥100 lawyers and the combined firm of ≥500 lawyers.

Merger success in extant literature is typically defined and measured through use of stock market metrics, or otherwise through methods that are poorly aligned with the organisational logics of pure PSFs. This study hence, of necessity, includes a novel multidimensional model to define and assess merger success in the context of large law firms, specifically.

Two iterations of analysis were performed, the first based primarily on data drawn from league tables published on law firm performance and reputation, and involving six conditions that would typically exist in and/or between law firms contemplating a merger. These conditions are: (1) a high-performing acquiror firm; (2) a target firm exhibiting high necessity for the merger; (3) power asymmetry in favour of the acquiror firm; (4) a high degree of relatedness between the firms; (5) a multi-dimensional strategic opportunity underpinning the merger; and (6) the combined firm adopting a unitary (as opposed to dispersed) approach to governance. In the second iteration of analysis, the first and third conditions were conflated and rubrics used to supplement the data used in the first.

The study is undertaken through the lens of the resource based view (RBV). The selected conditions therefore relate to VRIO resources that are enhanced or acquired through the mergers, following previous research that define VRIO resources consistent with sustainable competitive advantage in PSFs.

Several pathways to successful mergers are identified and described. A multidimensional strategic opportunity is shown to be, of itself, both necessary and sufficient for success under almost all circumstances, overriding in importance several other factors that practitioners typically consider to be of at least equal importance. Three types of merger are identified that the study shows to be consistently successful. These are assortative mergers (in which the merging firms have a high degree of relatedness to each other, in configuration with a multidimensional strategic opportunity), white knight mergers (where a strong acquiring firm combines with a poorly performing target firm) and leapfrog mergers (where a target firm that is not poorly performing combines with a larger firm with which it has a high degree of relatedness.)

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Keywords: merger, fsQCA, configuration, law firm, professional service firm, strategy.
• Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management; H Social Sciences > HG Finance; K Law > K Law (General)
• Colleges/Schools: College of Social Sciences > Adam Smith Business School
• Supervisor's Name: Keston-Siebert, Professor Sabina, Reihlen, Professor Markus and Dimitratos, Professor Pavlos
• Date of Award: 2024
• Depositing User: Theses Team
• Unique ID: glathesis:2024-84152
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 29 Feb 2024 15:25
• Last Modified: 04 Mar 2024 09:34
• Thesis DOI: 10.5525/gla.thesis.84152
• URI: https://theses.gla.ac.uk/id/eprint/84152