Unfortunately, I have lived through this unpleasant experience! So I thought I would share a few tips and tricks with you in this article on how I was able to survive, and thrive, in the aftermath of my public company being acquired by one of our largest competitors. Here’s what happened:
In the third year after I joined my first company as an in-house lawyer, an activist shareholder filed a 13D disclosure statement with the SEC (essentially a filing that says an investor has taken an “active” position of more than 5 percent in a public company and wants to shake things up, usually by replacing the board or an outright sale). Our company was targeted because senior management was aging, our stock price was languishing, and we were suffering poor results after a bad acquisition of our own a few years earlier.
As soon as the 13D was filed, rumors started flying around. Senior lawyers in the department were placed under NDA and all sorts of due diligence began. It was impossible to focus on our jobs and most of us sat around every day speculating about what would happen. Many people started preparing their exit strategies by updating their resumes, reaching out to outside law firms, and generally preparing for what we all knew would be massive turnover once the deal closed. It was not a fun time.
Five months after the 13D, the CEO announced by conference call that we were being acquired by one of our biggest competitors. Nobody was happy and the number of people leaving increased. Senior management assured us that our cultures were identical and perfectly compatible but those turned out to be lies. In fact, the lawyers from the acquirer were totally different in terms of training, pedigree, and risk appetite. The integration teams couldn’t agree on anything and, within six months of the deal closing, most of our senior management team that had been named to the joint leadership team of the combined company (including our GC) had quit. Things were a total mess.
But while all this was going on, I stumbled into an opportunity to leave the company, and made my exit a month after the deal closed (more on this in a future post). I was able to watch my old colleagues from the benefit of a new position in a much more stable and higher profile company (which wasn’t without its own problems throughout its legal department – again, more on that in a future post). Nevertheless, I ended up returning to the new, combined company two years later and, with the benefit of some hindsight, here are five pieces of advice based on my experience:
- Find a new job. Easier said than done, but from the moment that your company is put up for sale your in-house lawyer job (or really any corporate support services job, for that matter) is at risk. Don’t leave yourself or your family exposed to the roulette wheel of corporate integration. Do the minimum to keep your job before the deal is announced and look long and hard for another opportunity. Take control of the situation and find something or somewhere stable to ride out the storm. Law firms, in their own perverse sort of way, can offer you that stability. I think this is one situation where I would actually recommend that you strongly consider leaving your in-house position for a firm – at least temporarily.
- In chaos there is opportunity. If you’re a high performer and you genuinely enjoy the industry that you work in, the chaos that the deal will engender may also create a buffet of opportunities for you. People will leave. People will get fired. New positions will get created. Figure out who is in charge of the integration team and throw your hat into the ring. You should be doing this while at the same time interviewing for every opening in town (assuming you want to stay in town). A number of my colleagues at the old company ended up moving up in the ranks very quickly as others either quit or were laid off. (Of course this assumes that you believe in new management’s vision – and you may not!)
- Consider trying something completely new. Maybe your company getting sold is a sign that it’s time to do something different. After all, you might just not see eye-to-eye with new management or agree with how the new company is being staffed and structured. In my case, I decided that it was a good time to head down a different path and see where it got me. I was underpaid at the time of the acquisition and felt like I wasn’t being valued properly. And in retrospect it was a good decision for me to leave because I was able to return to the old company at a much higher salary than when I left. Plus, the merged company was in a much better position in the market after the acquisition and certain aspects of the culture that I didn’t like pre-merger had been swept away as senior management turned over. Bottom line: it can be a good thing to hit the reset button even if you recognize that your new position is just a stepping stone into something else.
- If you do leave, stay in touch with your old colleagues that stick it out. This is pretty basic advice in general – never, ever burn bridges. You just don’t know how things are going to play out even after you pull the plug. In my case, an old colleague that I didn’t report to ended up getting promoted twice within the two years of the merger and ended up hiring me back as a direct report. That never would have happened had I stuck around. This means being proactive about scheduling calls to check in, lunch or coffee if you are still in the same town, and just generally making yourself available to discuss what opportunities might exist, and whether your colleague can steer you towards them. I have been hired twice by former colleagues into my in-house positions and I attribute it completely to remaining in touch with them. Again, don’t burn bridges! Your future self will thank you for it.
- If you decide to return, negotiate as hard as you possibly can on the way back in. This is probably the most difficult part of getting hired back by an old colleague. On the one hand, you are grateful that he or she is going to bat for you and wants to bring you back into the fold. On the other hand, you don’t want to take advantage of that trust and push for too high of a base salary or other benefits. My advice is to treat the negotiation like any other. If your colleague respects you (he or she must, otherwise you wouldn’t be in this position in the first place) then it won’t matter. You will negotiate, you will (hopefully) accept, and you will both forget about it when you turn up for your first day back on the job. And just because the company is different don’t assume that compensation structures will have changed such that you’ll be able to get a better deal down the line. You always have the most leverage before you accept the offer to go back.
What do you think? Have you ever lived through a merger or acquisition as an in-house lawyer? Do you have any other advice for in-house lawyers who are going through this unpleasant experience?