Organisational restructuring is notoriously tumultuous for a business. Kate Gibbs goes behind the scenes of some mergers in the legal profession to explore how HR can contribute to the process
Two companies meet, merge, and live happily ever after. Another decides to list on the stock exchange, and the market and world applauds. They sound like fairytales. But behind the scenes an organisational restructure demands great things from its human resources departments, which often become the organisations’ knights in shining armour.
Six mergers in nine months for Slater & Gordon
When it comes to restructuring, few organisations have seen activity like Australian law firm Slater & Gordon, now Slater & Gordon Limited. Ambitious law firms may be nothing new, but six mergers in nine months and a complete overhaul of the traditional law firm model via a stock market float required quite a bit of work behind the scenes.
Slater & Gordon’s $35 million IPO on the Australian Stock Exchange in May last year gave it capital to acquire six other law firms, bankroll lateral hires, increase advertising spend and upscale the volume of its capital-intensive conditional fee arrangement (no-win, no-fee) plaintiff work.
It is exhausting just hearing about it, but for the firm’s HR team, the various restructures have demanded their close and energetic attention.
Real estate agents say “position, position, position”, but Slater & Gordon’s Melbourne managing director, Andrew Grech, appropriates the catchcry for his own purposes in an effort to sum up what was needed of his HR department: “Communication, communication, communication.”
Grech’s HR team had to be transparent with people regarding what conditions were going to be like after the ASX listing, as well as what the merging of the various firms meant for its staff and culture.
Communication didn’t always have to come from HR itself; much of the “talking” came via HR’s setting up focus groups between members of staff.
After the first merger, for example, the firm was able to make use of those who had already been through the experience by the time the next merger came around. “So, rather than talking to HR, they would talk to those we had already merged with,”says Grech. “So they could get an idea about what sort of issues crop up.”
HR had to ensure there was a structured line of communication and that the communication was two-way. “It’s not about imparting information, but about using one-on-one interviews, surveys and other systems to make sure we are listening and acting upon the concerns that people had,” says Grech.
Communication is key
Communication also sat high on the to-do list for the HR department at HWL Ebsworth, which, prior to February was two law firms – Ebsworth & Ebsworth and Home Wilkinson Lowry (HWL).
Going through a merger demanded clear communication for Bianca Miselowski, HR manager at the merged firm, and her team. “That was the driving force of having things run smoothly,” she says.
“[It was] having people informed about what the merger was about, trying to bring the key people together to ensure everything was connected and we all understood the timeframes and had the deadlines in front of us,” Miselowski says.
Focus groups enabled people from each of the joining firms to participate in a fortnightly session whereby, irrespective of their position in the firm, they could literally sit around a table and flag issues as they saw them.
The HR team brought together support staff, solicitors, members of management and administration in these focus groups in an effort to alleviate any potential issues and problems. “These could be simple things, from resources available, to understanding the expectations from a financial perspective with regards to their KPIs – [it was] a whole host of things,” says Miselowski.
Communication with shareholders suddenly became an issue for Slater & Gordon’s new format. Moving from the very insular organisational make-up of a law firm, with its partnership structure, to a publicly listed company, required an overhaul of the way the firm communicated externally, as well as its internal communications. Transparency suddenly became more than just a company value when the firm listed; it became a regulatory requirement.
As a result of its new obligations, under which its financials and all of its affairs would be there for the world to see, the firm’s HR team spent a long time running financial literacy programmes for staff.
HR had to run courses that would help staff understand the financial and economic underpinnings of the practice, why the firm’s commitment to social justice issues were so important, and “why it was part of the fabric of the place”, says Grech. “We ran climate surveys, forums, a hundred or more activities over the years.”
But communication and aligning the organisation with the people was only the beginning. Much of the work also centred on laying new foundations for a new organisational model.
“From a governance perspective in the early stages, HR was doing the planning, and laying the conceptual framework around having an independent board, making sure there were correct delegations between the board, the managing director and others,” says Slater & Gordon’s Grech.
“HR had to really help do the groundwork to ensure there was an environment in which a good governance structure could be overlayed.”
If communication is half the job for HR in any corporate restructure, planning is the other half. At both Slater & Gordon and HWL Ebsworth, HR was involved from the beginning stages, so it was able to fully identify potential challenges and appreciate the objectives of the restructures.
Maintaining individual culture
Identifying or maintaining the organisations’ culture became a priority for HR, which had to ensure that the values were kept in place and that all staff were on board. In the case of a merger, culture will often be key in both companies’ decision to merge.
Before Ebsworth & Ebsworth and HWL became one, HR was involved in research to establish the synergies between the two firms. “We were educated along the way as to what we were trying to achieve and we were to instil that in the other staff of the firm,” says Miselowski.
Miselowski and her team spurred the managing partner to deliver a series of value sessions to staff from both firms, which included taking them through the vision for the merger and what management was trying to achieve.
Planning also involved working on the due diligence of the two firms. HR was on board for the whole process, from initial discussions and conceptualisation to interviewing candidates.
HR had to be involved in the finest details of organisation, from developing tools such as information directories and survival guides, to broader conceptualisation and pre-empting issues incoming staff may have had.
“Like anything else, we started at the rudimentary level, where we went through the key areas of the business,” says Miselowksi. “The starting point was working through the pre-planning stage, to even get to a point where you can start making formal offers,”she says.
“We worked through each key area, developing information sessions and getting information across to all staff.” After this pre-planning, she says, “everything would fall into place”.
Challenges did crop up in each of these cases, but nothing that could not be handled via careful communication and transparency. Miselowski says that “helping everyone understand the objective of the merger” was one hurdle.
“The change management aspect couldn’t afford to be discounted,” she says. “[There was] change on all levels – from a technical point of view, having people adjust to new systems, to policies, procedure and a change of environment.”
Slater & Gordon’s groundbreaking listing was no different. Being the first firm to ever list on the stock exchange, there were no successes to turn to as cases in point. So the firm’s HR team had to rely on the intelligence and common sense of the professionals it had under its wing.
“It’s very hard in a legal services business because you’re dealing with people who are very highly motivated, very ambitious, very talented in their own way,”says Grech. “And perhaps they don’t have a deep understanding of what HR is trying to achieve.”
But even Miselowski admits that her experience with a restructure “wasn’t a fairytale”.
In any corporate restructure, she says, an enormous amount of planning, organisation and communication is essential. The HWL Ebsworth team puts the restructure task workload at “300 times” what the HR team did on a normal day.