Source: Practical Accountant

Joel Cooperman, managing partner of Citrin Cooperman & Company in New York City, gives some experience-based advice on making mergers successful.

Citrin Cooperman was founded in 1979 and has since consummated 19 combination transactions. Most have been structured as “admissions” to reduce liability.

Following are principles that have enhanced the firm’s success:

• Don’t merge for the purpose of increasing business.
• Don’t obsess about client retention. Clients usually remain.Make sure clients are not in unwanted industries.
• Incoming firm management should provide evaluations of their staffs.
• The combination should be profitable even without increases in business.
• A letter of intent should cover critical issues such as name, quality control, voting rights, compensation, and equity.
• Due diligence should cover not only financial metrics, but quality control as well.
• Incoming staff and partners should be assigned to mentors.
  Management should deal with incoming partners and staff through the mentors. This prevents the new people from feeling pressured.
• Incoming staff and partners should be trained on software, time sheets, expense reports, and soft skills.
• If new partners haven’t been enjoying financial success, the firm should help them exploit their opportunities.

Citrin Cooperman attributes its success to its compassion for people, and its focus on training and programs that continually create a better work environment.

From Practical Accountant, November 2006, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809. For the complete article, click on the following link: http://www.webcpa.com/article.cfm?articleid=22285&;pg=pracacc.