Phyllis Weiss Haserot's
Organizational Effectiveness Issue of the Month

GROWTH BY LATERAL ACQUISITIONS:
COMPLICATIONS AND PITFALLS

September, 2004

In their eagerness to add experienced professionals, organizations need to pay greater attention to how they integrate new individuals and groups. The decision to add is usually much simpler than the integration process.

Here is my list of a dozen frequent complications and pitfalls that firms face in making lateral acquisitions.

• Differing cultures and visions for the firm and for individual practices.

• Bringing people in opportunistically rather than as part of a strategic plan.

• Erroneous or differing expectations on increased revenue and how soon it will materialize.

• Firm-centric vs. ego-centric aspirations.

• Differing personal behavioral styles - need to focus on understanding behaviors.

• Execution - Not enough reaching out - expecting the other guy to do it A formal integration program of at least 6 months is required.

• Anxiety or even paranoia about sharing clients. Many professionals want to keep the business they arrive with as "portable", just in case of a future move. Fear that clients will get more attached to another partner or executive.

• Trust issues are paramount. It is necessary to take the time to build trust. Ignore this at the firm's peril.

** Mismanaging the people issues and not identifying work expectations - their's or the firm's beyond compensation expectations.

• Unanticipated client conflicts. Efforts must be made to make clients comfortable with personnel changes.

• Neglect of internal marketing (can lead to trust issues, unsatisfactory business generation).

• Dissatisfaction with external marketing of the lateral additions and what they add to the firm..

Then there are some Special Complications that can breed dangerous resentment:

• When someone is brought in from the outside to head an existing practice area, possibly causing resentment from current practice heads and anxiety of practice team members.

• When compensation levels or hourly rates differ too much from existing partners' rates.

Execution is almost everything; how the people issues are handled ultimately determines success or failure.

For guidance on effective execution of lateral integration see www.pdcounsel.com/lateral.html and http://www.pdcounsel.com/lateral%20add%20trans%20change.htm "Tips for Lateral Additions, Transitions and Cultural Change"

© Phyllis Weiss Haserot, 2004. All rights reserved. _____________________________________________________________________________

Studies show that coaching increases skill development by 88%! Explore your, or your colleagues', needs for bringing in more business, navigating firm culture or other workplace issues in a confidential, free interview with Phyllis by calling 212-593-1549.

Ask about our programs, *Capitalizing on Your Personal Style* and * Get a Seat at the Table* and new coaching groups on "Building Your Influence."
See www.pdcounsel.com

We welcome and encourage your comments to pwhaserot@pdcounsel.com

To be put on the list for a free subscription to this e-Alert, send an e-mail to pwhaserot@pdcounsel.com with "Organizational Effectiveness" in the subject line. And for my *Inter-Generational Relations* monthly e-tip, put "Inter-Generational Relations" in the subject line.