Law Firm Merger Agreement

Question:

Our firm, a fourteen-attorney litigation firm in Sacramento, California, is planning on merging/acquiring a three-attorney firm in the area. We have completed our due diligence and both firms have agreed on the terms of the merger. What type of agreement and legal documents do we need to effect and implement the merger?

Response:

If business law is not your forte you may want to consult with a business attorney to determine the appropriate legal agreements that should be used to effect the merger. The agreement may be as simple as a Letter of Intent signed by the two law firms, a Memorandum of Understanding, or as formal as a merger agreement covering the major details and terms of the merger which have been approved by required vote of the partners of both firms including:

Merged firm name
Effective date of the merger
Method of integration, assets and liabilities contributed by each firm, and whether accounts receivable and work in process will be pooled and contributed
Management and governance structure and names of partners from each firm that will hold key management roles/positions
Compensation system for partners, non-equity partners, associates, and staff
How employee benefits will be handled and integrated
Capital contributions
Employees and their respective roles in the merged firm

Typical exhibits to agreements often include:

Employee Benefits Summary
Asset/Equipment Purchase Agreement
Employee Roster and Wage Rates
Proforma Balance Sheet
Proforma Income Statement
Partner Compensation Plan
Non-Equity Partner Compensation Plan
Associate Attorney Compensation Plan
Staff Compensation Plan
Attorney Career Advancement Plan
Office Lease
Partnership Agreement

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John W. Olmstead, MBA, Ph.D, CMC

Posted at 09:11 PM in Mergers
Tags: Agreement, Firm, Law, Merger

Jul 04, 2017

Law Firm Merger Agreement

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