Source: Journal of Accountancy

Part one of this two-part article reviewed some reasons that CPA firm mergers fail. Part two discusses the importance of a properly designed and executed transition plan that addresses client and staff retention.

When a merger is announced, clients’ biggest concerns are:

• Will the partner I work with still be there?
• Will my fees go up?
• Will there be changes in the staff and procedures I’m accustomed to?
• Will the firm’s offices move?

Things you can do to assuage these concerns include:

• Inform clients about the merger before the news becomes public, but close enough to the announcement to minimize the time they have to make erroneous assumptions about the deal.
• Send a consistent, positive message about how clients will benefit from the merger.
• Make the announcement in a way that’s appropriate for each client. For example, the most important clients should receive a personal visit from the partner in charge of their account.
• If the partner in charge will be replaced or phased out, arrange a personal introduction to his or her successor.

Staff members will be concerned about job security, compensation and benefits, and employment agreements, and they will have a general fear of change. Steps you can take to improve staff retention include:

• Tell people about the merger in person, informing senior staff first.
• Send a positive message about the merger, emphasizing the benefits of the transaction and the things that won’t change, and reassure staff that they will have a job after the merger.
• Let people know how the merger will affect compensation and benefits. Avoid pay cuts, instead freezing compensation to bring salaries in line over time. Consider cash adjustments to compensate for lost benefits.
• If new employment agreements are required, present them in a positive light, emphasizing security and certainty.
• Discuss how the merger will affect employees’ reporting relationships and job opportunities.
• Provide orientation and training for new employees.
• Provide a forum for employees to ask questions and explore what the merger will mean for them.

For the complete article, click here and read “Keeping It Together.”

From the April 2009 issue of Journal of Accountancy, American Institute of Certified Public Accountants, http://www.journalofaccountancy.com/Issues/2009/Apr.

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