Case Studies
Mergers

Law Center for Families: An Interview with John Hedges

In the spring of 1999, La Piana Associates Inc. was contracted to facilitate the negotiation of the merger of the Community Law Center (CLC) and the Legal Aid Society of Alameda County (LASAC).  Both organizations were located in Alameda County, California.  Negotiations took place from early March, 1999 through May, 1999.  The Board of Directors of each of the organizations voted to merge at their May, 1999 board meetings, with the effective date of the merger being August 5, 1999. 

We recently interviewed John Hedges, Interim Executive Director, to learn more about how the implementation process went.   John was hired five months after the legal merger date and remained involved with the organization, in that capacity, for a year and three months.

Background

CLC was established in 1978 by Sister Simone Campbell under the auspices of her Order, the Sisters of Social Service.  From the very beginning, Sister Simone provided legal services on a sliding fee scale basis, believing that clients retained their dignity if they contributed financially toward the cost of their services.  Over time, CLC’s services narrowed to family law and probate matters, areas of the law where low-income persons have great difficulty finding affordable representation.  CLC was the only legal services organization serving Alameda County that focused exclusively on the provision of a full array of family law services to low and moderate-income persons.

LASAC, established around 1930, had long been known not only as the lead legal services agency in Alameda County, but also as one of the most formidable advocacy agencies for the poor in the United States.  It also had a long history of providing a wide variety of legal services to low-income residents in Alameda County.  One of its original founders was Supreme Court Chief Justice Earl Warren.

Prior to the merger LASAC had a budget of $500,000 and CLC had a budget of $350,000.  In 1998, LASAC assisted approximately 5,000 persons and CLC assisted almost 1,000 persons.  Three quarters of the population assisted by CLC and LASAC were persons of color.  In 1998, more then 900 children lived in households assisted by CLC, over half of which were affected by domestic violence.

Beginning the Implementation Process

As a result of the merger of CLC and LASAC, the new organization was initially named the Community Legal Aid Society of Alameda County.   The name was later changed to the Law Center for Families.  The former Executive Director of LASAC became the first Executive Director of the newly merged organization; however he resigned in December of 1999.  John Hedges become the Interim Executive Director in January of 2000 and served in that role through March 2001, when a new Executive Director was hired. 

The Board of Directors of the newly merged organization was comprised of members of the two prior organizations, with some prior members choosing not to continue.  The primary exception to this was that the new board’s membership had to be made up solely of lawyers, as required by the exemption status of the former CLC, which became the surviving corporation.  This meant that former non-lawyer board members from LASAC (many of whom were former clients) could not remain on the board.  Those members, however, were placed on a Community Advisory Board.  The Community Advisory Board has ex-officio seats on all board committees as well as the Executive Committee of the Board of Directors. 

With the exception of the bookkeeper/accountant, the staff of the Law Center for Families is entirely new since the legal merger date.  Some members of the current staff were hired right after the merger and some came on during the implementation period.  Both organizations had open positions during the period leading up to the merger.  These positions were not filled in anticipation of the implementation of the merger.

John Hedges stated that there were some growing pains that were apparent when he came on, but acknowledged that they were “not super difficult.  The board was not sure who it was, or what it wanted to do, although it had some discussions about what it wanted to become.”  In addition,

“Staff was not sure they knew what they were.  They were not cohesive as a staff and they were skeptical of the board.  The staff certainly did not appreciate the board.  [They also] had unrealistic ideas of what the organization could do.  They thought the organization was going to [focus on] major litigation, hire more staff and grow immediately.  However, my analysis was that they would have been out of business in six months if they continued drawing at the rate they were.” 

Success Factors

John Hedges offered that one of the factors that made the implementation process easier was that they were, for the most part, working with a new organization in terms of staffing.  Some of the original staff that departed were somewhat negative toward the changes that were taking place. 

“… I think the fact that they left allowed change to occur, which needed to occur in order to create a new organization.   The staff who remained were no longer were saying, ‘No, No, No’.  The staff who remained were able to sit down and work through some of that ‘no’ so that they began to feel that they were valued and they had a say in the direction of the new organization.  It was a relatively long process.” 

The new Board of Directors also struggled with the organization’s identity around the issue of providing services to the working poor and charging fees, which needed to be worked through.  Additionally the board, on the whole, did not have a cohesive feeling of what their job was.  At about this time, the organization hired a new Development Director.  “We then gave the board major tasks around fund raising.  We assigned them different people to talk with, to call on the phone.  This process bought them a stake in what the organization was doing.  Interestingly, this process brought them to the point of asking ‘What is this organization?’”

Gradually the board began to coalesce and chose a new name for the organization – Law Center for Families. 

“We then took the name and contracted with somebody to prepare a logo and to prepare pamphlets and brochures, because one of the things that we discovered was that nobody knew what the Law Center for Families was or what it did.  The process then was to select a logo with both the staff and the board participating.  The board ultimately chose the logo the staff had recommended.  We then started preparing materials – brochures and a newsletter to describe the organization and its services.  I think that process really helped because it gave staff input – by participating in the editing.  We finally got it back and it seemed like we made major progress in defining who we were by the simple process of coming up with a logo, a brochure and then eventually a newsletter.  We could then start taking this material out  – showing the organization to people.” 

While this process was not without a fair degree of disagreement, it ultimately resulted in agreement and a defining of the organization.

In the meantime the board was out raising money.  The Development Director was doing promotional events – television and radio appearances etc. The organization set up an event in the fall which celebrated the first year as a merged organization.  They invited all the politicians, many of whom participated.   These politicians were enthusiastic, stating that “this is a great organization and we want to support it.”  The board saw this as ‘We are important,’ and was very impressed. “We had the mayors of various cities.  We had supervisors. We had state representatives.  We had all the kinds of people who made the board feel like they were doing something important.”  John Hedges believes the board began seeing the organization in a very new way when they saw these politicians willing to show up or send letters if they could not be in attendance.   Additionally, the organization has been able to translate this into other kinds of support as they go back to the various cities and the county.  According to Hedges, the board came out of this event and its follow up with the feeling that “we are part of something and we are growing.”

This was coupled with an initiative in which the board members were asked to directly contact people for donations. 

“We were more successful then either previous organization had ever been in the amount of money they raised.  The response was very good.  I think it was just the tip of the iceberg because I don’t think we had the organizational time necessary to do the job correctly.  But it was an incredible amount of support.” 

Another incident occurred that helped in cultivating the board to do fund raising.  Hedges found an anonymous donor who agreed to match the minimum amount donated by any board member, up to a thousand dollars.  The board sat in a meeting and argued about how much money they should put in and they agreed everyone would donate $250.  It prompted them to call some board members who had not been attending, because the vote had to be unanimous.  Ultimately every board member donated $250.   Hedges described the process of reaching that decision as a very supportive one, and through it the members suddenly realized that this is what boards are all about: “They are going to raise money and that is their job.”  These events all solidified the board and, as a result, they are now working well together.

Challenges

The organization is still struggling with the staff not truly appreciating the board.  Hedges explains: “I think it’s because staff does not have a good comprehension of what boards can accomplish.  They do not know what they actually do or what their role is.  All the board can do is have input, make policy and raise money.”  Staff seemed to have come around after some individuals who were struggling with the changes left the organization.  “Those people leaving allowed us to hire people who had a common vision of where we want to go and what we wanted to become.  We still have some potential problems.  But, it has come a long way.”

One of the issues that needed to be addressed early on was that the organization had an administrative structure but did not have sufficient staff to provide services.  The challenge was to translate this administrative structure, along with a fund balance, a building, and potential, into an organization that provides services to people.   Fortunately the organization was able to stabilize program services through the use of contract attorneys.  It was initially difficult to hire employees into an organization with such instability, so these contractors – “very good, dedicated people” - were the solution.

Leadership

John himself, acting as Interim Executive Director, was probably the most significant leader or “champion” during the implementation process.  The first thing the organization needed to do was to find a vision of what the new organization was - to really understand what the organization wanted to become.  “Until we fully got a grasp of who we were as an organization, I don’t think we could have moved forward.”  There were other roles for Hedges, such as neutralizing naysayers and addressing staff doubts. 

“There was one member of the staff who was critical of the merger and critical of everything that was going on.  We were able to bring her in by increasing the amount of work she had to do and by consulting her, and not tolerating negative outbursts.  As a result she was brought in so that she had a stake in the success of the organization. By the time she left she was very supportive of the organization.  She saw that we were going someplace and she was excited by it.”

Hedges also led the effort to get the board more committed to fundraising, especially at a personal level.  Having the board contribute money personally increased their commitment to the organization.  “It changed – it was at that point that it became OURS.  This [organization] currently belongs to us, this is part of the community.”  That, along with the development of the brochure and logo, helped the board develop a much greater sense of unity.

Managing the Implementation Process

Hedges explained that there was no formal structure in place to manage the implementation of the merger. 

“There was no direction at all.  The major part of it was bringing staff together and delegating out individual authority to everybody, so that individual staff members had authority and were empowered to move forward.   They worked on merging all the files and continuing the work that needed to be done.” 

John Hedges’ job was basically that of a facilitator.  He was there to make decisions and to help staff bring the systems together – so that it was their organization.   He also helped by encouraging staff to work together.  “Much of what was happening was getting staff to talk with each other so that they were beginning to work as a team.”

At some points Hedges did believe they needed a more structured plan. 

“We had somewhat of a plan and several times we sat down and generally tried to make a plan.  We had a fundraising plan – many of the tasks we implemented were a result of the fundraising plan.  It would have been nice to have had people who had more knowledge of organizational structure or who could have helped us construct a plan and set up timelines.” 

Hedges believes that it would have been helpful to have someone in charge of implementation who really thought about implementation in August, immediately after the merger, rather than waiting until January. 

“I think we lost some initiative that we could have taken with different organizations out there, and some funding sources.

“It was a merger of equals rather than one organization taking over another, and looking back, it might have been just as easy to have had one organization taking over another, or to have fired both directors and hired somebody whose task it was to come up with direction and vision in managing the implementation.  I don’t see how the board itself can actually do a merger.  I don’t see how they can unless there is someone who has an incredible amount of time, vision and leadership and can get in to the daily activities of the organization.”

Bringing in someone specifically for the purpose of implementation can be a tough job, but one that could be helpful to the process. 

“…because you have to take on the director, or board members or anybody else who is opposed - and there is always opposition, because you are changing.  It may take some diagnostics of the two organizations to figure out what really is needed, somebody from the outside coming in and saying – Okay, we negotiated a merger now we’re going to implement it.  What do we really need to implement this merger?”