11 Nov Culture is the deal: Why people make or break M&A success
At Marsden, we see first-hand that the success of a merger or acquisition often hinges on something many organisations underestimate: people. When we advise on law firm combinations, help integrate in-house legal teams post-deal, or support leadership transitions, one certainty runs through it all – culture isn’t a box to tick after signing; it’s the heart of what makes a deal work.
That message came through loud and clear at a recent panel discussion hosted by Killik & Co., and Winmark, moderated by Marsden’s Karen Glass, where M&A leaders shared lessons on building long-term value through M&A, and why getting the people piece right is not just important, but decisive. This event was part of our wider mission to support and elevate the role of General Counsel within organisations and ensure they are ‘in the room’ with the C-suite.
Culture first, everything else second
David Beech, CEO of Knights plc, has completed more than two dozen acquisitions of UK law firms. His perspective is clear: cultural fit comes before strategy. “The one deal that went wrong,” he said, “was the one we rushed.”
Before looking at financials or strategic alignment, David’s team focuses on whether the organisations are compatible in terms of shared values, ways of working, and leadership styles. If that alignment isn’t there, no amount of planning can compensate.
Once the deal is signed, Knights fully integrates new businesses on day one; IT systems are migrated, branding is changed, and teams are combined immediately. Half-measures, David argues, create confusion and slow progress. His five-step approach—appointing a cultural integration leader, mixing teams early, removing toxic behaviours, reshaping the physical environment, and acting fast— underpins a 90% post-merger retention rate, including founders and senior talent. People stability is the strongest sign that cultural integration is working.
Integration is a people process, not a project plan
Rob Newnes-Smith, former CTO for Digital & Employees at Thomson Reuters, has experienced over two decades of integrations. For him, a deal is much more than a point in time transaction, it’s the start of a changed construct – one that only works when each Function involved is prepared and funded to assimilate the new entity and evolve.
He describes a shift from opportunism—“let’s buy it and assume it will be valuable”—to realism, where the integration is planned in detail ahead of day zero. The hygiene part is preparing for how those people and capabilities will work together from day one. Will employees know what’s changing and what isn’t, can customers still be served seamlessly, and do all the systems communicate to facilitate that? But much more than that, it is about understanding what you’re buying, in terms of talent, technology, customer relationships and other assets, so they can be carefully assimilated to add long term value to the acquiring entity.
None of that happens without leadership ownership. Deals without executive sponsorship drift, budgets get eroded, and integration cracks get papered over. Rob’s approach includes structured due diligence playbooks, high performing cross-functional collaboration, and honest and open post-integration reviews to capture and apply lessons for next time. It is important that the block and tackling of integrations are turned into repeatable and efficient processes, leaving time to discuss what is different, unique, or highly valuable about a deal at hand.
Governance matters, because people do
Claire Walsh, Group General Counsel of Learning Technologies Group, added another crucial dimension to the discussion: governance and internal capability. In her view, CEO involvement should begin as early as the term sheet stage, not just for major transactions, but for all deals. Early leadership engagement ensures strategic clarity and sets the tone for how the deal will be handled.
Claire has built a strong in-house deal team, reducing reliance on external advisors and deepening the organisation’s understanding of the businesses it acquires. This doesn’t just save money but embeds capability and confidence within the team. While external reports remain important for lenders and regulators, internal expertise improves agility and sets the integration up for success.
Good governance may sound procedural, but at its heart it’s about people. It gives teams clarity, aligns expectations, and ensures decisions made early don’t become costly surprises later.
People are the real due diligence
Across all three perspectives, there was one common element – M&A is fundamentally about people. Cultural compatibility isn’t something that can be outsourced to a consultant’s report; it’s discovered through direct engagement and honest conversation. Meeting founders early, testing for collaborative, low-ego mindsets, and being transparent about what will change post-deal comprise the moments where future integration success is won or lost.
Founders’ behaviour after a deal is especially telling. Their willingness to adapt and lead by example shapes how the rest of the team responds. Rapidly removing toxic behaviours sends a powerful signal about what the new organisation stands for, while embedding acquired talent and flattening hierarchies helps unlock potential that might otherwise stay hidden.
Earn-outs can help motivate founders, but they must be structured carefully to align incentives with shared goals and cultural integration, not just short-term financial outcomes.
Value is created after the deal
One of the biggest misconceptions about M&A is that value is realised at signing. In reality, that’s just the beginning. The real value emerges in the integration phase, when people, systems and ideas start to work together in new ways – and that doesn’t happen overnight. Cultural integration alone can take a year or more, and sustaining momentum requires continuous attention and learning.
As the panel concluded, culture isn’t a soft consideration – it’s the cornerstone of M&A success. Prioritising it from the earliest conversations through to post-deal integration transforms M&A from a transactional exercise into a catalyst for growth.
Or, as David put it best: “M&A is ultimately about people.” Get that right, and everything else follows.