Social Strategy

It seems that every year lawyers and executives are becoming more and more savvy about social media usage, and some are applying that expertise to the realm of mergers and acquisitions. Fasken Martineau’s 2013 Social Media M&A survey shows that a substantial percentage of senior M&A executives surveyed used social media platforms to research potential acquisition targets, as well as parties to transactions.

Most execs don’t plan to develop a specific social media strategy for M&A, but Fasken Martineau notes that those percentages may change following the Securities and Exchange Commission’s announcement that companies are now permitted to share market-moving news on social media.

36% Respondents who used social media to investigate potential acquisition targets in the past year

48% Executives who used social media to research companies involved in transactions

72% Respondents who said that LinkedIn added the most value to due diligence, rather than other social platforms

77% Executives who do not have a social media strategy specifically geared toward M&A


Compliance Challenges

Regulatory enforcement is a major challenge for companies nationwide, as indicated by a growth in federal whistleblower programs and an uptick in prosecutions for violations of the Foreign Corrupt Practices Act and other laws.

Now a new study from CEB shows that workplace changes such as layoffs, leadership overhauls and organizational restructuring—seemingly perennial occurrences in the current economic climate—can increase the risk of misconduct, especially if employees are left uninformed about such shifts.

84% Workers who have experienced a recent change in their business operations

42% Potential decrease in misconduct risk at companies who inform employees in advance about organizational changes

7.9% Shareholder returns of companies who communicate effectively with their employees

2.1% Shareholder returns of companies who do not practice effective communication strategies


Rising Revenues

Despite a still-sluggish economy, BigLaw did well for itself last year—revenues at AmLaw 100 firms grew by more than 3 percent last year. Not to be outdone, firms that rank between #101 and #200 on AmLaw’s list also grew their revenues last year. The so-called “Second Hundred,” however, achieved their revenue growth with a slightly different strategy.

Instead of following the example of the AmLaw 100 firms, which generally limit partner numbers and overall headcount to guarantee large profits for partners, the Second Hundred made more lawyers partners, in an effort to drive down rates for clients.

1.1% Increase in equity partners in the Second Hundred in 2012

10.1% Increase in non-equity partners in the Second Hundred in the same time frame

2.5% Increase in non-equity partners at the AmLaw 100, which did not increase equity partners at all

3.4% Revenue growth at AmLaw 100 firms last year

3.2% Revenue growth at the Second Hundred over the same time period


Training Troubles

Despite a seemingly endless string of headlines about anti-bribery and anti-corruption enforcement actions, many companies still neglect to educate third parties and business partners about proper compliance practices, according to the Anti-Bribery & Corruption Benchmarking Report from Kroll and Compliance Week.

Companies are failing to implement proper training programs despite the fact that most large corporations say that they expect their risks to rise in the future.

53% Respondents who train third parties and business partners on anti-corruption efforts

30% Percentage of those respondents who believe that their training efforts are effective

18% Companies that have no anti-corruption policy, or that do not require their employees to read it

41% Businesses with less than $1 billion in annual revenue that expect their compliance risk to rise

54% Larger corporations that expect an increase in their compliance risk


Mounting Mergers

Mergers and acquisitions professionals expect both M&As and cash deployments to stay steady or increase during the second half of the year, according to a recent poll by Deloitte. Despite this increase, the vast majority of respondents had not recently updated their equity risk premium (ERP) calculations, which help companies to understand a stock’s excess return over a risk-free rate.

40.2% Executives who anticipate an increase in mergers and acquisitions

21.8% Executives who foresee an increase in cash deployments

11.5% Respondents who updated company ERP for cost analysis within the past year

25.6% Respondents who said that capital constraints are the biggest challenge companies face when deploying capital

20.2% Respondents who cited a lack of realistic growth and operational targets as their biggest challenge