Merge with caution

Pete Kalis, chairman and global managing partner, K&L Gates

Mergers are sometimes a necessary part
of the business world, and Pete Kalis, chairman and global managing partner of K&L
Gates, has had his fair share of experience.

Under Kalis’ watch, the firm has done
seven mergers in a 10-year span, including
one in January 2007, which merged Kalis’
firm Kirkpatrick & Lockhart Nicholson
Graham LLP with Preston Gates & Ellis
LLP.

Yet, it was a merger that happened on Jan.
1, 2005, that took Kalis’ firm international.
The merger involved joining forces with a
firm in London. Kalis says it was one of the
most substantial trans-Atlantic mergers in
the law profession, and it didn’t happen
overnight nor did it happen behind closed
doors.

Kalis says the process began with a period
of study and evaluation in 2001 and 2002.
Then, there was dialogue with the partners
across the firm to determine their views and
interest in a significant office in London.

“It continued through the identification of
a merger partner through lots of communications with the partnership during that
process,” he says. “When the matter
became a little more ripe, we brought the
leadership of the U.K. firm through our
major offices twice and involved the partners in the dialogue directly. We privately
would meet with our partners in various
offices to listen to their questions, concerns,
suggestions. Then when it came time to vote
on the merger, our roughly 200 partners in
the U.S. voted unanimously in favor of it.
And I think, partly, that reflected the very
open and transparent and nonparanoid
process.”

In addition, since culture is an important
part of K&L Gates, it’s important that a firm
merging with the organization be on the
same page.

“Cultures and organizations differ; there
is no question about it,” he says. “I have
never found one identical exactly to our
own and so on. You can tell a lot about a
law firm’s culture from its leadership, if
they are long term. Are they cohesive? Are
they collaborative? Are they collegial? Ask
yourself those three questions. If it comes
out yes, yes and yes, then you can say,
‘Alright, we’re good on culture, let’s move
on to economics.’”

Kalis says the reason his company’s
mergers have gone smoothly is because of
the amount of work he and his staff do on
the front end.

“We typically — well before there’s a
handshake deal — will have the practice
leaders across our firm and the other firm
meeting, having videoconferences, and discussing ideas and opportunities,” Kalis says.
“If they were to come back and say, ‘What a
bunch of dolts,’ I think it would stop there,
and, in fact, it has once or twice.”