NEW YORK: The Ruder Finn Group companies, including Finn Partners, RF|Binder Partners, and Ruder Finn, officially became independent of one another on February 28.
The Ruder Finn Group now includes only Ruder Finn and its international offices, the agency heads confirmed.
"Ruder Finn Group doesn’t really exist anymore," said Kathy Bloomgarden, CEO of Ruder Finn. "Now it is just made up of Ruder Finn’s PR, digital agency, and international operations."
A family affair
Ruder Finn Group’s ownership initially involved the four children of co-founder David Finn, which included Ruder Finn’s Bloomgarden; RF|Binder CEO Amy Binder; Finn Partners CEO Peter Finn; and Dena Merriam, one of Finn Partners’ managing partners - each executive owned an equal share of the business.
At the time of Finn Partners' spin-off, Bloomgarden said Ruder Finn kept 70% of the firm's business, and nine of its 10 largest clients, as well as the bulk of its global business. All of Ruder Finn's healthcare clients, including pharmaceutical giant Novartis, stayed with the agency. The two companies also "split" personnel from various offices, and Ruder Finn continued to focus on corporate reputation, technology, health and wellness, and consumer lifestyle work.
When Finn Partners launched, it had about $18 million of business; now it is operating at just over $50 million, Peter Finn said.
"The reason we launched Finn Partners as an independent company, and the reason RF|Binder spun off quite a number of years ago, is so that each one of us could have the freedom to develop and grow our business in the way that works for us and fits our own business philosophies," he said.
Figures were initially reported as a whole group, but RF|Binder began reporting independently in 2001, and Finn Partners and Ruder Finn started reporting independently in 2012, according to Binder.
"This is an evolution of a process that has been in the works for a while," explained Binder. "It gives us the freedom to make choices for future growth that are solely focused on what is best for our clients and for the people working at RF|Binder."
In an interview with PRWeek from 2008, David Finn discussed his book, The Corporate Oligarch, published in 1969, about people who run companies. In one chapter on families, he pointed out examples of sons and daughters going into the PR business with their fathers, saying "it didn’t work out."
"I wrote that giving a message to my four children: don’t think about coming into the business; it’s probably a lousy idea," he said.
He added, "Now, Bill Ruder had a rule that his children could not work in the business. I did not have that rule."
Peter, who was the first to come into the family business, was planning on becoming a teacher in New England, said David Finn in the interview, but he asked his son to try PR first, and Peter wound up liking it.
Ruder Finn Group’s structure contrasts the Edelman model, in which founder Daniel J. Edelman gave one of his three children – Richard – controlling interest of the agency when he was planning succession. Richard Edelman’s siblings also work at the firm: Renee Edelman is an SVP, and John Edelman is MD of its global engagement and CSR initiative.
Changes and benefits
As an agency, Ruder Finn was moving in a different direction from the other firms in the group, so separation was vital, said Bloomgarden.
"The nature of our work has dramatically changed and separated us from our sister agencies that were part of the group," she added. "It was healthy for us to separate into different companies."
About 86% of Ruder Finn’s clients are large, multinational businesses. By separating, the firm has been able to invest in areas of the business that are "strong, powerful, and growing," said Bloomgarden.
Bloomgarden, Binder, and Finn declined to comment on how the firms handled financials in the split, in terms of payoffs or buyouts.
Since Finn Partners spun off, Ruder Finn has benefited, Bloomgarden said, noting that in 2013 the firm grew 13%. This year, she added, Ruder Finn is on a stronger double-digit growth path than last year.
RF|Binder previously used Ruder Finn Group’s international network, and will continue working with Ruder Finn Asia, but the firm is putting together its own global network, according to Binder.
"We have a number of clients that need support around the world," she said. "I have been interviewing agencies [to partner with] in other countries, including Paris and London."
Another change Binder noted is that she has her own board of directors now, which she is currently filling.
Meanwhile, Finn Partners opened an office in London in January 2013, and will continue to focus on international expansion.
"We won’t be doing anything in Asia near-term," Peter Finn said. "We’re focused more on Europe right now."
Challenges: Allocation and clients
The legal implications in this kind of situation come down to allocation and clients, said David Harmon, a partner in the law firm of Norris McLaughlin & Marcus.
"The divorcing firms more than likely considered within their breakup agreement allocation of the dollars, such as receivables, payables, liabilities, current and future litigation, and allocation and future servicing of their clients," said Harmon.
He added that firms could be affected in the future by "restrictions on competition and solicitation of existing and prospective clients, as well as employees."
The manner in which these issues are resolved will have an impact on the future business of each entity, he added.
Bloomgarden contends that no legal or client-related issues have sprung up due to the change.
"Our businesses had zero overlap and zero sharing of people," she said. "As we have been operating independently [since 2011], there isn’t much of a change now."
She added that her clients haven’t been affected because Ruder Finn’s clients are "quite different" from the former Ruder Finn Group’s sister agencies.
Likewise, Binder said the majority of RF|Binder‘s clients didn’t even realize the firm was a part of Ruder Finn.
Companies spinning off operations seem to be the "spirit of our times today," said Bloomgarden, who noted News Corp.’s spin-off last June when it split into two publicly traded companies.
Ruder Finn alums share insights
Andy Pray, who founded Praytell Strategy in December 2012, worked at Ruder Finn from 2007 to 2012, serving in the San Francisco, New York, and London offices, as well as working on the agency’s digital arm, RFI Studios.
He said the firms have been operating independently for years, even before the split in 2011.
The official separation is "good for [the agencies] and good for everybody because they really do have such terrifically different focuses and skill sets," explained Pray.
"[Bloomgarden] loves global business and she’s awesome at it, but Finn Partners isn’t focused on that so, for all of the agencies, it really does help to have that separation be finalized because it’s been a long time coming," he added.
By completely gaining independence, Pray said each firm can "own their narrative, escape the past, and move forward."Julie Binder, head of corporate communications at ADT, worked at Ruder Finn from 2004 to 2011, serving most recently as EVP of corporate communications.
Binder said she’s "happy to hear that the split is official because it will allow both companies to pursue their own vision."
"I worked closely with Bloomgarden for seven years, and found her to be an incredibly inspiring leader who works hand in hand with her people to push boundaries, think with a global mindset, and strive for new levels of excellence in client service," she explained. "I'm excited to see what Kathy and her team accomplish now that the split is complete."
She added that she expects Ruder Finn to become stronger than ever with its independence.
Some other PR pros who have worked for the Ruder Finn network include Bonin Bough, VP of global media and consumer engagement at Mondelez International; Robert Dowling, president of FleishmanHillard’s US East Region and GM of New York; Tony Telloni, MD at GolinHarris; Anita Larsen, director of North American communications at Unilever; Lindsay Lorraine, independent consultant, who most recently led corporate and ecomagination communications at General Electric; Mindy Gikas, EVP and leader of North American talent at Porter Novelli; David Carter, SVP of business development at Coyne; Renee Martin, EVP at DKC Public Relations; Harry Pforzheimer, former CCO of Symantec; Andrew Edwards, VP of PR research at Nielsen; and Don Spetner, senior corporate adviser at Weber Shandwick.