Mergers and Acquisitions
Accounting firms are increasingly facing the decision of whether to grow organically or purchase the necessary knowledge and talent. Then there are accounting firms that instinctively know they cannot continue operating the same way with an aging partner group and the next level of leadership representing a 15-year age gap. Worst of all, there is no natural heir apparent or even a cohort that can service as a three-person executive committee?
What’s a managing partner to do? If the decision is to merge upward or be acquired, it cannot be reached in a “quick, let’s get it done fashion.” Think of the factors in this: existing clients and staff, competition and marketplace demographics.
Consider the current condition of your firm; are you putting your best foot forward to make it an attractive target?
Partners will undoubtedly retire or be removed. If you are the acquiring firm, is this transaction affordable in terms of paying out the partners? Do you know what your clients will say and how they will react to your announcement?
Operationally, you will have to research how best to integrate the operations, select the right IT platform, share relevant information with the staff, reconcile the different approaches to human capital management and growth, review professional liability coverage – and these are just for starters.
The last thing you must consider is the meshing of two cultures. You can conduct all the due diligence and communication necessary, but you will not be assured of success. One firm believes in cross-selling, the other takes an “eat what you kill” approach. One highly encourages continued professional and personal growth while the other wants its staff to simply fulfill the minimum requirements of the State Board of Accountancy.
When you commit to a merger or acquisition, be sure you establish a relationship with a consultant who understands that the real work begins when the transaction papers are signed. You won’t know if your desired ROI will be reached until the firm goes through a couple of business cycles. Like a marriage, it take time and patience and compromise to be able to handle the occasional snafus that arise. And like a marriage (or should be), you are in for the long haul.
Steve is CEO of Solutions to Results, LLC, a practice that addresses the business communications challenges that individuals, firms and organizations face. Visit his website at www.solutions2results.com for more insight.